Candys drop out of Noho plan and default on £221m loan
THE Candy brothers have abandoned a flagship property scheme in London and failed to repay a loan for a project in Beverly Hills.
Nick and Christian Candy have pulled out of their involvement in the redevelopment of the Middlesex Hospital north of Oxford Street, renamed Noho Square.
CPC Group, the investment firm run by Christian, also defaulted on a $365million (£221.2million) loan for prime land bought last year in Beverly Hills, where the firm plans to build apartments.
The loan, from a syndicate led by Credit Suisse, was due to be repaid this month and attempts to extend it collapsed.
Christian is expected to fly to New York to hammer out an agreement in the coming days. It underlines the crisis facing the brothers as the property market in London collapses, availability of cash for construction plummets, and the brothers' relationship with troubled Icelandic bank Kaupthing unravels.
CPC and interior design firm Candy & Candy are behind some of London's biggest housing projects, including One Hyde Park and Chelsea Barracks. Kaupthing was the brothers' investment partner on the Noho Square and Beverly Hills schemes, but was recently nationalised by the Icelandic government as the island's banking system collapsed.
CPC had planned to build hundreds of apartments on the three-acre Noho Square site. But now it has walked away from the project, with losses of £5 million, and transferred its share to Kaupthing.
In return, CPC has taken full own-ership of the Beverly Hills 9900 Wilshire development, along with another partner, restaurateur Richard Caring.
A CPC spokesman said: "The agreement with Kaupthing will see Candy & Candy remain in its role as development managers, interior designers and in a sales and marketing capacity for the Wilshire project.
"For Noho Square, Candy & Candy will cease to continue as development managers, interior designers and sales and marketing consultants."
The Candys and Kaupthing bought the Noho Square site in 2006 for £175 million, which was seen at the time as about £25 million above its real value. It is now worth between £50 million and £100 million.
The One Hyde park development in Knightsbridge is set to be the most exclusive ever built in London, with apartments selling to wealthy foreigners for tens of millions of pounds.
However, the proposals for Chelsea Barracks, which include 600 homes and a hotel, have run into opposition from residents in the area, who claim that the design is not fit for the site.
