Euro Exim Bank

Candy and Candy – Sweetening London’s Top Property Deal

ImageThe headlines scream SPENDING CUTS, the politicians espouse AUSTERITY, and consumer confidence has TANKED.  But while the man/woman in the street is tightening their belts and cutting back on luxuries, London’s glitziest property moguls are rubbing their hands.

That’s because the Candy Brothers, Christian and Nick, have just turned over sales of £62m since January in the biggest recession since the Wall Street Crash.  They’ve redefined luxury at the One Hyde Park development and taken opulence to a whole new level. 

The only problem is, the newspapers exclaim, the sales receipts fall far short of the developers’ hyped asking prices – and the revelation is sending property journos and business commentators alike into a tailspin.

The apartments were widely touted as costing from £6.5m for a one bedroom starter home, up to £140m for a penthouse stack on the top three floors. The actual exchange prices according to Land Registry figures show that one sixth floor property sold for £22m, with another on the sixth floor making £21.6m, while another has gone for £14.85m. Finally, one buyer bagged a second floor flat for £3.8m – a steal when you consider the asking price was almost double that amount.

The buyers are still shrouded in mystery since three of the apartments have been bought through offshore trusts. According to The Guardian newspaper, a couple from Surrey in their 40s bought the £21.6m crash pad, but little is known of their identities which has further fuelled speculation.

Candy aesthetic encompasses swimming pools that turn into ballrooms, fur fridges, Bond movie security: iris-recognition systems in the lifts, panic rooms and bullet-proof glass.

The burning issue here is money – Candy and Candy borrowed £1.1bn from the aptly named Eurohypo Bank to finance their dream development. The question on everyone’s lips is whether or not they will be able to repay the loan. Parts of the press seem determined to wipe the smiles from the Candys’ faces. A tough call, as it happens, since the Candy brothers are the sternest pairing since the Kray twins. But then that’s probably down to the fact that away from the bubbly TV shows, property development is a very serious business…

They maybe high-flyers now, but the brothers set out from humble beginnings. They borrowed £6,000 from their grandmother to do up their first property, in 1995 – a £120,000 one-bedroom flat in London’s Earls Court. They were both still in their early-twenties and negative equity was still haunting London’s property market after the late 1980s boom and subsequent bust.

Still, the Candys turned a £50k profit in a very tough market. Easy to see then how they caught the developing bug – but who could have predicted how successful they would eventually become?

A decade later, they own a global portfolio worth a reputed £9 billion – including swathes of London’s most prestigious real estate – and with square footage selling for £6,000 per foot at One Hyde Park – the most expensive real estate ever in the world’s most valuable markets.

They grew up in the Surrey commuter belt, where their father ran an art studio and media production firm; their mother was a drama teacher. Nick, 18 months older than his brother, studied human geography at Reading and went into advertising. Meanwhile, Christian studied business management at King’s College London, before joining Merrill Lynch.

After the continuing success of their first few ventures, the brothers quit their jobs to focus solely on property development – initially specialising in slick bachelor pads. Their genius lay in identifying London’s rising stock – this was fast becoming the city where everyone wanted to live.

As the 1990s drew to a close the Capital was awash with money – Middle Eastern royalty, Russian oligarchs, cash-rich Chinese entrepreneurs, and billionaire tax exiles; the property market had discovered Luxe – and this world needed to be filled with beautiful and expensive things.

We’re not just talking sumptuous décor, acres of marble, and state-of-the-art gadgets – the Candy aesthetic encompasses swimming pools that turn into ballrooms, fur fridges, Bond movie security: iris-recognition systems in the lifts, panic rooms and bullet-proof glass. It’s a far cry from a lowly bachelor pad in Earls Court.

At the height of the market in 2006, the Candys are renowned for overpaying for sites to secure the deal. Perhaps it’s this perceived flashiness that irks their detractors? Or possibly it’s the politics of envy – the £11m Candyscape yacht, the houses around the world, the Ferraris, Bentleys, and Rollers?

Indeed, certain sectors of the press could barely contain their glee over the news that the brothers had been exposed to the 2008 collapse of Icelandic bank Kaupthing. Like many entrepreneurs, Candy and Candy were forced to restructure during the financial crisis, losing control over a site in Beverley Hills, Chelsea Bar and another on the Middlesex Hospital site.

The brothers also divested their stake in the 12.8 acre Chelsea Barracks site. Candy and Candy along with investment group Qatari Diar paid almost £1billion for the plot when it was sold by the Ministry of Defence in 2007 at the apex of the property boom.

Clearly concerned, Nick Candy said at the time: “We are never looking to sell anything. However if Qatari Diar approached us and said they want to buy our equity, of course, we are friends with Qatar and I would do whatever they want me to do.

“I am not going to tell you nothing is going to change for ever and ever but up until we get planning, the agreement between Qatari Diar and CPC Group [the Candys’ company] nothing will change.”

Of course, news of their demise was greatly exaggerated, and the company appears to be in rude health today. Last year the brothers reportedly made an astonishing profit of £190m from a 17,500 sq foot penthouse in Monaco. They paid just £10m for the property after a tragic fire. Meanwhile, it was recently reported that Christian Candy was bidding to secure a gold mine in the Philippines. Solomon Capital is the brothers’ private equity arm which has invested in Metals Exploration with gold and copper interests in the Pacific.

But has their Midas touch held out with One Hyde Park? A spokeswoman for Candy & Candy said that deals on 50 apartments have now been completed with Land Registry details yet to be filed. With the bulk of the apartments now sold, it leaves just 30 left to go.

An ever bullish – and smiling – Nick Candy explained to the Daily Telegraph that £900m of the £1.1bn Eurohypo loan has already been repaid. “The balance will be paid by the end of the month.”