London's NoHo Square Back on the Market

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(LONDON, UK) -- NoHo Square was a fabled project in London, a boom era splash of decadence and luxury targeting the city's growing international affluent class.

Promoted by the flamboyant Candy brothers, Nick and Christian, the plan was to turn the former Middlesex Hospital site in Fitzrovia into an array of offices and posh residences. Backed by Kaupthing, the Iceland bank, the Candy's paid £175 million ($262 million) for the property in 2006 and won approval for an 890,000-square-foot development the next year, including more than 200 luxury apartments.

Now the site is nothing more than an empty lot, a symbol of an ambitious development that never happened.

Last week, state-owned Kaupthing officially brought an end to the latest chapter of the NoHo saga, announcing it would sell the property to the highest bidder.

The Candys' NoHo Square concept crashed and burned long ago, but Kaupthing's announcement revived memories of a project that stoked controversy and excitement, representing the days when luxury projects were sprouting like weeds in London neighborhoods.

NoHo's fate also mirrors the fortunes of the Candy brothers, who made their marks as designers to the rich and famous. At the height of London's luxury binge, Candy & Candy made millions and launched developments in some of the city's priciest neighborhoods, including the troubled Chelsea Barracks redevelopment.

NoHo was supposed to extend the Knightsbridge-Mayfair vibe to Fitzrovia, but the project soon stalled, as the flow of free-spending Russians and Middle Eastern buyers ground to a halt. The project was quickly redubbed, "No Hope Square."

In 2008, Kaupthing, which was at the heart of the banking collapse in Iceland, bought out the Candy's, essentially swapping their interest for property on Wilshire Blvd in Beverly Hills. In a statement the Candy's described the California property as "the best eight acres on the west coast of America," and emphasized that they "remain committed to creating a world-class development within Beverly Hills as our first foray into the U.S."

Three weeks ago a company controlled by Christian Candy lost the Beverly Hills property to lenders.

But don't weep for the Candys. A recent profile detailed their lifestyle in Monaco, where they live in the penthouse once owned by financier Edmund Safra. Current projects include the Foster + Partners-designed 21 Chesham Place in Belgravia and One Hyde Park, the development with 86 luxury apartments on the border of Hyde Park and Knightsbridge.

Meanwhile, Kaupthing is trying to move forward on the Fitzrovia site, where the old hospital was demolished two years ago. Last March, the bank announced a deal to develop the site with Stanhope, the noted London developer. As part of the deal, Stanhope reportedly scraped the Candy brothers' lavish design, opting for a more conservative approach to the site.

Stanhope is expected to be involved in the bidding for the site, which analysts believe could raise about £100 million ($150 million)--a steep discount from the £175 million price tag in 2006.

CB Richard Ellis has been appointed to handle the sale

"A cleared three acre site in a core West End location with planning for almost 900,000 square feet of mixed use development represents a unique opportunity and will attract interest from a range of U.K. and international purchasers," Adam Hetherington, central London managing director for CB Richard Ellis, told Property Week.

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