The MT Interview: The Candy brothers

The developers to the mega-rich have taken a few knocks lately: a court case over Chelsea Barracks, making a loss in 2010 and unsuccessful projects in London and Los Angeles.

by Chris Blackhurst
Last Updated: 09 Oct 2013

But with apartments at their One Hyde Park development selling for £6,000 a square foot don't start feeling sorry for them yet. Nick Candy will do me a deal. The flat we're in, at One Hyde Park, the new Candy & Candy development in London's Knightsbridge, is on the market for £58m. He'll let me have it for £57m.

He's serious. But he's grinning as he says it - he knows I can't afford it. For a mad, fleeting moment, I wonder what it would be like to take him up on his offer.

To move into the realm of Nick and his brother, Christian, is to enter a different land - one in which the numbers that are bandied about invariably come with strings of noughts attached. A flashy land removed from austerity and any bother about cuts and VAT rises.

The Candys don't cater for you or me - they're only interested in the world's super-rich, who can easily afford a four-bedroom flat costing £57m. And more than half of the 87 apartments at One Hyde Park are sold. All four penthouses have gone. The top price, well over £100m, was received from someone making a casual inquiry via the internet on a weekend afternoon.

Such folk exist, it seems. There you are, casting around on Google because you're bored and a few clicks later you're on your way to spending more than £100m.

They won't say who he is, but 'he's not an Arab, not a Russian'. It's safe to assume, though, he's not British and wants a base in London to go with the properties he already owns in Dubai, New York, Hong Kong, Shanghai or wherever.

He and the other purchasers will move into what the Candys maintain, with characteristic lack of understatement, are 'the most valuable apartments in the world'. Their reasoning goes that London is the planet's pre-eminent financial centre and a tax haven for many foreigners. Its best residential location, they argue, is at the top of Sloane Street, the city's most fashionable shopping street, bang opposite Harvey Nicks and directly adjacent to Hyde Park.

The buyers of One Hyde Park get that address, plus bomb blast-protected windows, fortress-type security, computerised lighting and audio, use of a state-of-the-art gym and pool ... the list of accoutrements and gadgetry goes on and on. And room service from the restaurants of superstar chefs Daniel Boulud and Heston Blumenthal at the Mandarin Oriental Hotel next door. And Candy & Candy interiors if they want them - oodles of marble and porcelain, and silk and leather wall coverings.

'We've completed over £900m of apartment sales, that's over 50% of the building,' says Nick. Three street-level retail units have been sold - to Rolex, McLaren and Abu Dhabi Investment Bank. The flat we're sitting in measures 9,500 square feet. It's mine for £6,000 a square foot - an unheard of sum, even for central London 'uber-prime', a Candy word.

That's the thing about the Candys. They tilt their collective caps upwards, to a level far removed from the rest of us. In doing so, they've become a phenomenon. 'London's best-known property wheeler-dealers' is how they were hailed in the Financial Times recently.

They've made themselves wealthy (a quick calculation on One Hyde Park suggests they paid £150m for the old Bowater office building, they say they spent £500m on construction, add £200m or so for advisors' fees, the average flat they claim is going for £20m and there are 87 in total, so they and their backers could be looking at collecting almost £900m). Christian reckons he and his brother are together worth £1bn.

But corroborating that figure is not easy. The current Sunday Times Rich List estimates their fortune at £300m, although some question this. Author Dr Philip Beresford says of the Candys: 'They are the most difficult people to value. There are diametrically opposed views on their net worth - they say one thing and a large section of the property community says another.'

Nick is 37 years old, Christian, 36. They've been in real estate all of 15 years - since they bought a flat in 1995 in Earl's Court for £122,000, aided by a £6,000 loan from their grandmother, and sold it for a £50,000 profit. Since then, they've turned a 19th-century building in Manresa Road in Chelsea into 16 'eight-star' apartments, one of which cost £27m and set a then London record. At Chesham Place in Belgravia, they've built another luxury block.

In La Belle Epoque, the penthouse apartment they shared in Monaco they reportedly had a silk rug which staff had to vacuum so that it had perfect stripes, like the tennis courts at Wimbledon. It was also graced by a 100-inch plasma TV screen and had no fewer than eight Gaggenau ovens in the kitchen. It has since been sold by the brothers for £199m. In the harbour were moored Candyscape I and Candyscape II, their giant yachts, and Catch Me If You Candy, their super-fast speed boat. Their glossy magazine for clients is called Candid.

But it's not all been plain sailing. They've also become associated in the last two to three years with failures: the former Middlesex Hospital north of Oxford Street, or as they dubbed it 'Noho Square'; Chelsea Barracks; and in the US, the site of the defunct Robinson's-May department store in Los Angeles.

They've been quick to attribute the blame elsewhere. Problems at Kaupthing, the Icelandic bank that funded the Middlesex Hospital and LA jobs were responsible for those flops. On Chelsea Barracks, they took their ex-partner Qatari Diar, the mighty Qatar sovereign wealth fund, to court.

Today, the brothers' businesses and habitats are divided. Unmarried Nick has returned to London (he is in a relationship with actress Holly Valance and lives in Chesham Place), where he oversees Candy & Candy, the interior design and development management operation. Its signature is entwined letter Cs, which they hope one day will be as recognisable as the Chanel logo. 'We're not like designers with their own house style,' says Nick. 'Our strength is that we can do more than one style. We work with clients and give them what they want - we can do classical, Art Deco, ultra-modern, minimalist, whatever they wish.'

Just-married Christian (to 'It' girl Emily Crompton) has stayed in Monaco, a tax exile, flying back and forth and running CPC, their Guernsey-based investment company. On top of this, Christian is currently trying to take over a £35m gold-mine in the Philippines, and he's just launched Omni Capital, a secured bridging lender to wealthy borrowers and small-scale developers.

They're very different personalities. Nick is front of house, gregarious, speaks non-stop, tends to be more casually dressed. Christian or 'Chris' is quieter and, when he does say something, more considered. Nick is the salesman, Chris is the numbers man. 'He's analytical, I'm more creative, product-oriented,' says Nick.

Both men have an easy, matey charm. They went to a smart, fee-paying school but in their accents, dress and manner, they're unplaceable, as much international as they are English.

They like to name-check their pals - anyone meeting them is left under no illusion as to just how well connected they are - and they're fixtures on the London social scene, often photographed with their rich and celebrity friends. They appear to be on first-name terms with everybody. But neither likes being crossed. Nick is not averse to calling up media editors and proprietors when things are not to his liking. While they exude bonhomie, they don't hesitate to respond if offended.

As a double act, they can be formidable - always in agreement, reinforcing the other's argument, finishing his sentences. They come across as stronger and sometimes more threatening than a solo operator.

Just as their projects are out of the reach of most people, neither are they to everybody's taste. Within the more conservative echelons of the property industry they're viewed askance and with suspicion. One accusation is that they set a false market for their properties - one of the flats is 'sold' to an investor or associate and that price then sets the rate for the whole development.

So, the mystery buyer of the £135m penthouse apartment at One Hyde Park was linked to them, and it was that sale which dictated the eye-watering £6,000 a square foot rate for the building. Not true, says Christian. 'We operate what we call the layering effect. We take a comparable and justify a valuation that is more than that. We take the base price and then we add x% for the architect, x% for the location, x% for the design, x% for the components. It's like an S-Class Mercedes. You can get one for £70,000 or you can get a Rolls-Royce Phantom for £250,000. They will both do the same speed but the Rolls-Royce is made from different materials and has a different standard of finishing.'

They're regarded by critics as not deserving of the publicity they receive, that for all their claims to be ground-breaking, they've yet to produce a truly historic piece of work. Neither is it always easy to discern whether they are fully investing in a project, or if they are merely managers being paid to look after money which belongs to others. Yet, for all their establishment detractors, they also have many admirers. Veteran property entrepreneurs Gerald Ronson and Tony Pidgley, are quick to praise the young brothers for their willingness to challenge the norm and take huge risks.

Now may hardly be the best time to be launching a block of luxury apartments. Another developer would have pulled out months ago. Not these two. They were concerned, admits Christian, but, overall, they claim not to be bothered. The more ebullient Nick chips in that this might be a worrying period economically, but it should be viewed as one of opportunity. 'Some of the great buildings in New York were built around the time of the Great Depression, such as the Rockefeller Center, Chrysler Building and Empire State.'

They play for big stakes, sometimes paying over the odds in order to secure their prize (their acquisition of Chelsea Barracks for £959m, paid for with Qatari cash, shocked the sector). On Chelsea Barracks, their plans were heavily opposed, Prince Charles weighed in and the Qatari funders had a rethink. The Candys, who were managing the scheme, were out. They had to resort to legal action for their fee. Christian's CPC won in court but settled with Qatari Diar out of court. They are under orders not to discuss the settlement publicly. They can't say how much they won - reports vary between £50m and £80m.

The collapse of Noho Square was another heavy blow. Their timing was bad, confesses Nick. Kaupthing hit trouble and, with it, Noho Square. Beverly Hills was also caught in the Icelandic meltdown. 'If your equity partner is a bank and it goes into administration there is not much you can do,' says Nick. 'All three Icelandic banks were going bust and yet two days before Kaupthing went into administration it was still promising to put equity into Beverly Hills. It must have known.'

The demise of Beverly Hills wasn't only down to Kaupthing's problems, though, was it? Even if it had gone ahead, questions were being asked in California as to whether the Wilshire Boulevard complex could ever fly, with the price paid for the property sending local eyebrows skywards.

Both brothers nod their heads in agreement. Says Nick: 'On Beverly Hills we paid too much.' He pauses. 'One hundred per cent, we did over-pay. We didn't do our research properly.' They bought the plot for $500m in 2006, it was sold recently for $148.5m.

He adds: 'Maybe we have to accept the good market is behind us,' pointing out that 'none of the big UK property guys have done a major deal in the last three years'.

There again, not everyone would be prepared to take one of the world's biggest financial players to court - don't they fear an overhang from the Chelsea litigation? Why would anyone want to be their business partner again for fear of being sued? 'Yes, we did think twice,' says Christian, 'but there were two principles to be upheld. First, we had a contract and that should be honoured. Second, the amount of money involved was not a sum that we could ignore.'

And, while they sued Qatari Diar, they insist they remain on good terms with the prime minister of Qatar, who is an investor in One Hyde Park. 'We speak to him and his family at least once a week.'

Their detractors need to realise, says Nick, that the knock-backs are part and parcel of the business they're in and that, actually, he feels 'quite humbled by what we've achieved. We've been in the industry 15 years. We've got 30 or 40 years ahead of us. What we've created so far are iconic buildings and we will create more - and we've got through the biggest depression that real estate has seen in modern times. We've had everything thrown at us - by the press, from every angle.'

One Hyde Park has attracted sniping for its opulence, but the apartments are not aimed at a Britain coping with an economic downturn. 'To say there are no Brits among the buyers so far would be wrong,' declares Nick. 'But they're mainly international and they have more than one home. They're asset rich, cash rich. They're affected by the recession but not in the same way the average UK punter is. Their worth may have gone down, say, from £10bn to £6bn or £1bn to £500m.'

Those who attack the apartments' over-the-top nature should also realise, says Christian, that 'this project employed 5,000 people globally - on site alone there were 2,500'. That's 5,000 people, he says again, who can claim they were trained by the Candys and have One Hyde Park on their CVs.

He adds: 'Yes, there are 87 apartments here but as part of the deal we've built the best affordable housing ever seen in terms of luxury and quality, 70 units in Pimlico. The old Metropolitan Police station. Boris Johnson opened it.'

And London may be a major world city, he argues, but it's not had serviced apartments of this standard - until now. 'In New York and Los Angeles, you can throw your car keys to the valet and he parks it. Same in Hong Kong and Singapore, the service is off the scale. In London it's sub-standard to abysmal. London has got better as it's become more international - you only have to look at the quality of the restaurants to see how improved it's become.'

That's one of the reasons why he and his brother chose to locate their apartments next to the Mandarin Oriental. 'The top three hotel brands in the world are Mandarin Oriental, Four Seasons and Peninsular. One Hyde Park will be looked after by 60 Mandarin Oriental staff - in fact it will be known as "One Hyde Park Residences at the Mandarin Oriental."'

There's no doubt that, for all his bullish chat, this is a more cautious Nick Candy. It's not so long ago the duo were opening what must have ranked as London's most extravagant set of offices, in Westminster. Now they're gone and Candy & Candy has new, smaller premises in Kensington. 'Westminster had 220 desks. That was when we had 110 to 120 staff and we thought we would reach 220. Now we're down to 90.' He adds: 'We realised we were going to need fewer jobs.' He laughs: 'We were made this amazing offer so we quit.' And it's not just the head office - one of the yachts has also been sold.

Candy & Candy, Nick admits, 'lost money last year. The credit crunch humbled us enormously,' he says. But, he claims: 'It will make money next year - it's engaged on over 30 design projects worldwide.'

Their father, Anthony, ran his own art studio and advertising production firm and their driven Greek-Cypriot mother, Patricia, went to stage school. (Candy is an Italian name.) The attention to and obsessiveness about design and detail, they inherited from their father. The eye for showmanship and their work ethic from their mother. Their parents are now separated and both help out with the business.

The boys grew up in Banstead, Surrey, going to Epsom College, the nearby public school. Nick played rugby for the first XV and was head boy.

He went to Reading University to study human geography, then worked at KPMG, J Walter Thompson and Dentsu. 'I'm a failed accountant basically. I passed my first year exams, not my second. I hated accountancy with a passion.'

Christian read business management at King's College, London and joined Merrill Lynch. They started out doing up flats and selling them in their spare time. They were making so much money they could pack in their day jobs and form Candy & Candy.

'We hit a wave,' says Nick. 'If you were trying to do the same thing today it would take perhaps three times as long.' It was 2000 and London property was racing ahead. 'We were lucky,' he adds. 'We created a brand and by early 2001 people were coming to us and saying we want you involved in our deals.'

Then in 2004, they paid £13m for 21 Chesham Place, a former BT phone exchange in Belgravia. Their plan was for six luxury flats. A year later, they had it revalued - for £25m. It was, they say, 'the first, big life-changing deal'. Norman Foster did the design and they went from doing one-off conversions to redeveloping whole sites.

In 2006, they bought two Thistle hotels in Kensington for £69m and, having secured planning permission for 97 apartments, sold the site 18 months later for £320m. The near £250m profit they made, says Nick, beaming, was achieved 'without taking a brick out of the building'.

In profitability terms that was their best move to date. Now, attention switches to One Hyde Park. There's more than money riding on the Knightsbridge block. The property world is watching to see if they can sell all the apartments and realise the prices they've been quoting. Not for the first time, the Candy brothers must prove the doubters wrong.


FOUR CHALLENGES FACING THE CANDYS

- To sell all the apartments in One Hyde Park and secure the prices they've claimed they will achieve

- To use One Hyde Park as a springboard for the development of a true landmark building - one that will earn them the respect of a sceptical property industry

- To widen their appeal beyond providing luxury accommodation for the super-rich and tax exiles coming to London

- To make Candy & Candy into a truly international brand that is valued everywhere

THE CANDYS IN A MINUTE

1973: Nick Candy is born on 23 January; Christian follows the next year on 31 July 1974

1995: They borrow £6,000 to buy and refurbish a flat in Earl's Court, making £50,000 profit

2003: Become full-time property developers, creating six luxury apartments in Belgravia in 2004, designed by Norman Foster. Attract the attention of Sheikh Hamad bin Jassim bin Jabr-al Thani, now the Qatari prime minister, who becomes a major business partner

2005: Begin developing One Hyde Park, with a £1bn loan

2006: Buy the site of the old Middlesex Hospital for £175m

2007: Buy Chelsea Barracks for Qatari Diar for £959m

2011: One Hyde Park completed.

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