High Street taskforce aims to to rejuvenate retail
Senior figures from across the banking, retail and property sectors have signed up to a new industry-wide group, the Distressed Retail Property Taskforce.
They are joining forces to find ways to rejuvenate failing town centres.
The taskforce may be one of the most significant developments since Mary Portas's much-talked-about review of the High Street.
Its first priority will be to find out how big the problem of retail property indebtedness is across the UK.
The group met for the first time last week, and on Monday announced who had signed up to the body.
Members include the British Council of Shopping Centres, the British Property Federation and the Local Government Association. Lloyds Bank and the Royal Bank of Scotland are also represented, along with the Booksellers Association.
Empty, dilapidated shops are a familiar scene across many of Britain's struggling town centres.
Whole swathes of retail - from shopping centres to run-down or shuttered-up shops - are worth far less than they used to be, with landlords unable or unwilling to invest, yet loath to sell and write off their debts.
Many landlords are also slow to cut the rents they demand in order to attract new tenants, because they have to earn a minimum rental income to keep up with their debt payments.
Often, the properties are no longer worth enough to repay those landlords' debts.
And that means the landlords and the banks that lent them the money to buy their properties in the first place, find themselves in the same boat together.
Both face the same dilemma - whether to invest in the property in the hope of selling it at a higher price in the future, or instead to throw in the towel and sell off the property even if this means a big loss for both the landlord and its lender.
In many cases, however, landlords and their banks have simply ducked this hard choice, and are instead trying to struggle on with idle or dilapidated retail space.
The challenge for the Distressed Retail Property Taskforce is how to break the stalemate.
It is the first time an industry-wide body has been formed to look at indebted properties, and several big banks are also taking part.
Its first task is to find out the true scale of the problem.
The Distressed Retail Property Taskforce will spend around six months gathering hard evidence on the true scale of the problem and the towns worst affected.
The big challenge is to try to come up with some solutions, according to Mark Williams, the chairman of the new body.
"The taskforce recognises that our High Streets are going through a structural recalibration, rather than an economic cycle from which we will emerge over time," he said.
And tough choices, he says, will have to be made:
"We have too many shops, the wrong size and under-invested. So the change in town centres that is required is significant and will require public and private sectors coming together to find ways of financing these changes.
"What we're talking about are essentially infrastructure projects that can future-proof our towns for the next 50 to 60 years," he said.
Last week, the governor of the Bank of England, Sir Mervyn King, made clear that the issue of over-indebted businesses is exercising his mind of too:
"I am not sure that advanced economies in general will find it easy to get out of their current predicament without creditors acknowledging further likely losses, a significant writing down of asset values and recapitalisation of their financial systems."
The problem for the banks is that turning off the life support machine on distressed property could cause too many losses for their balance sheets to bear.
The taskforce has the challenge of trying to come up with a workable, long-term solution.