The Candy Brothers

Ultra-luxury real estate developers, Candy & Candy were sucked into what could have been a disastrous situation recently when one of their partners in two large scale projects, Icelandic bank Kaupthing, was nationalized by the Icelandic government this month. Candy & Candy have apparently come to a deal whereby they have relinquished interest in NoHo Square, a 12-acre project on the old Middlesex hospital site in London, in exchange for a majority stake in 9900 Wilshire, a luxury condominium development in Beverly Hills, Los Angeles.

Perhaps not the ideal timing, but I understand CPC Group, who represent Candy & Candy were in a position to take majority stakes in both shemes. This could have resulted in a lengthy legal battle with Kaupthing, so a quick decision was reached. NoHo square has already been put up for sale, although there are some suggestions that it has now lost as much as £160 million in value, due to falling property values in London.

Candy & Candy must still re-negotiate the loan  on 9900 Wilshire - which is now in default, and face the issue of selling luxury condominiums into an already over supplied market. Los Angeles is one of the hardest-hit US markets currently, with the S&P Case shiller index showing a fall of 26.7% in home values in LA over the last year.

Fortunately, Candy & Candy are well placed to weather the current financial storm, and their Chelsea Barracks project appears to have solid backing. Considerable opposition was voiced when the project was first announced, with the Duke of Westminster voicing the opinion that the development, which is being financed by the Qatari royal family after buying the site from the Ministry of Defence, is “more akin to office complexes,” than homes.

Many of C&C’s developments are at the very top end of the luxury real estate market, such as One Hyde Park in London, so assuming the Russian government continues to pump money into their ailing financial markets at the rate they are doing, there should be enough Russian billionaires left to keep them out of trouble.

NoHo square
9900 Wilshire
Candy & Candy