Blue and bruised as industry may already be, there is still a resounding blow to come. As recovery approaches and property prices liven, Britain's banks will take a hard new look at their loan portfolios. Where they find troubled companies with loans backed by property assets, they will think again.
Do they risk keeping the company afloat? Or sell the property for a guaranteed return? Sadly, many will do the latter. Property prices have fallen by 25% for central offices and 10% for industrial sites since the mid-1989 peak, and it seems that we are bumping along the bottom. Property buyers are eagerly standing by. And for the banks, the time to move is imminent.
Some winners will emerge: property companies which held back in the boom times and, unburdened with large debts, can buy at bargain prices. Among them are: Hammerson Property, a favourite with gearing of 54%, but the scope to take on more; Land Securities, geared at 32%; Frogmore Estates, boasting nil gearing; and Burford Holdings, likewise negligibly geared. Most importantly, these winners-to-be also have rental income which easily covers interest costs.