When it comes to healthcare property, expect far closer interaction between the private and public sectors in France, says Vincent Moulard who heads up healthcare property at big French property investment company Gecina, which has a 39% stake in Gecimed, the specialist healthcare investment trust.

Moulard says that the Larche report, presented to the president in April, really emphasised the need for far greater involvement of the private sector: "We are already seeing this in one or two cases where a clinic is built on a joint basis - perhaps parts of the hospital are sublet to the public sector. There is immense potential for more such developments."

But the private sector's role is still constrained. French private hospitals typically get all their revenue from the public sector, but the idea of a private hospital operator taking over a public hospital is still taboo. Such takeovers have happened frequently in Germany when municipalities run out of money, but are "politically unacceptable" in France.

Yet Moulard says that several public hospitals have already been closed in France, and in these cases a private clinic is sometimes developed nearby.

Meanwhile, he says that private operators continue to rationalise their operations. General de Sante merged two clinics on a new site at Le Havre, and plans more rationalisations.

He does not expect the healthcare property market to be savaged by the credit crunch, because, with both care homes and hospitals, it is very hard to develop new properties: "There is a real scarcity value."

He also says that he has very few competitors, naming specialist property funds Axa and ING, and property companies Foncieres Des Murs and Belgian Confinimmo. He adds that the market never reached the giddy heights attained in the UK.

Meanwhile, most of the large consolidators, who together control around 37% of the French private hospital market - General de Sante, Capio, Vitalia, Medi-Partenaires and Vidici - are keen to do sale and leasebacks. "General de Sante has already done a lot, as have care home groups like Orpea and Medica. These groups want to raise the cash for the next acquisition and see property as a way of doing this," explains Moulard.

He says that Capio and Medi-Partenaires are also investigating leasebacks, and says the market has by no means dried up.

But yields will have to rise a little - he says that, at under 7%, they are too close to the bank base rate of 5%, and the company passed on four General de Sante properties in August.

Moulard remains cautious, and expects his healthcare property investments, currently at €650m, to grow by only €100m-150m this year, and to reach €1bn by 2012.