As in Britain, it is a crisis that grabs the headlines. 'Who will meet the bill for the property crisis?' 'Sales of offices in free fall' 'A downturn which could infect the entire economy' are recent offerings from Liberation, the French daily. The message they carry is being read with increasing gloom by the French banking system.
Paris has around the same amount of office space as London - about 35 million square metres - and underwent a comparable property spree in the late 1980s. While stricter planning controls mean the degree of overdevelopment has been less severe than in London, a further 5 million square metres or so of space is due to come on stream in the near future and vacancy rates are likely to rise above 9 per cent before too long.
Inevitably, rents and values have been hit. Since their 1990 peak, rents have fallen by around 20 per cent while prime capital values may have halved - although with virtually no one buying it is difficult to be exact.
Moreover, the fast-deteriorating economy means the outlook is getting worse. 'Since the rentree (after summer holidays) we've noticed a big downturn,' said Robert Waterland of the Paris office of the surveyors Jones Lang Wootton. 'The situation is very sombre indeed. While the government is talking about a 2.8 per cent growth next year, no one believes them for a minute. People are saying at the best it will be 1 per cent.' He believes it will be two years or more before things improve.
Some public projects, like the extension of the La Defense development, have admittedly been put on hold. But the damage has been done and it is the banks that will have to pay.
'Until the late 1980s the French property market was cautiously run, with most developments financed early on by institutional investors,' Mr Waterland said.
'But at the end of the 1980s there was the most enormous boom and escalating rents and ever lower yields meant they just weren't interested any more. So the banks stepped in and simply poured money into the sector.'
Property lending by French banks grew at an annual compound rate of more than 35 per cent between 1988 and mid-1992, from less than Fr19bn to more than Fr215bn ( pounds 27bn). Off-balance-sheet loans take the true figure closer to Fr250bn.
But despite warnings from the Commission Bancaire, the French banking regulator, banks have so far been reluctant to make big provisions.
A recent report from the brokers Goldman Sachs points out that at the peak of the last property crisis in France in 1984, doubtful loans to developers reached 32 per cent of total property lending and provisions rose to more than half of doubtful loans.
'It is difficult to exclude a similar level of risk over the next 2-3 years given the current environment,' the study warned.
Goldman believes that Fr7bn- Fr8bn of provisions will be needed to the end of this year, with a similar amount next year. So far there have probably been Fr4bn-Fr5bn, although about half of this relates to non-French properties.
'It is a serious problem for the banks,' said Susan Sternglass, Goldman's executive director of international research. But at least the problem is quite tightly focused on two kinds of lending and in relatively few quoted groups, she said.
One of the biggest areas of concern is loans to the marchands de biens. These are small trader/developers, often groups of estate agents, who banded together to undertake highly speculative commercial and residential projects on ambitious rental and capital growth assumptions.
Such loans account for around Fr75bn of total property sector lending, most coming from specialised lenders.
'Among the quoted companies only really subsidiaries of the Suez group and of Gan (an insurance group) are heavily exposed to the marchands,' Ms Sternglass said.
With both groups relatively strong, the risk of a property-provoked failure in the quoted banking sector is small, she argued.
The other problem area for the banks concerns about half a dozen giant Paris redevelopments which account for around Fr25bn of total lending. Here it is the investment banks that have done most of the lending, with Paribas, Indosuez and Credit Lyonnais all heavily exposed - although again, according to Ms Sternglass, the banks concerned are able to cope.
But if the problem is localised at the moment, there are grave doubts that it can be contained for much longer, given the worsening state of the French economy. The banking comunity in France, as in the UK, looks set to regret its 1980s profligacy.
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