Property tycoons Nick and Christian Candy have taken over two luxury residential projects after partner Kaupthing, an Icelandic bank, defaulted on loan agreements.

The bank was the biggest stakeholder of a West End project at the former Middlesex Hospital near Oxford Street and a development in Beverly Hills in Los Angeles.

The bank had a 60% stake in Noho Square, London, which was acquired for £175 million in 2006. It provided a loan for that running until 2011.

Nick Candy said he was in talks about acquiring the debt at a reduced rate and refinancing.

Kaupthing held 40% in the US site, which was bought in April 2007 for £250 million and has planning permission for more than 200 luxury apartments as well as retail space.

The Candy brothers said they paid “market rate” for the projects. The sites originally cost £425 million.

The developers are expected to announce a new partner for the Californian project next month.

The sale came as a $365 million (£211.6 million) loan from Credit Suisse on the Beverly Hills purchase came up for repayment.

The Candys say they expect to get an extension.

Kaupthing received a €500 million (£387 million) emergency loan from Iceland's central bank this week to bolster its balance sheet following the nationalisation of rivals Landsbanki and Glitnir.