Property tycoon Christian Candy has been granted permission to build a £30 million housing development in Chelsea.

Despite the effect of the credit crunch on the property market, Kingsgate House on the King's Road is set to be turned into 49 flats as well as three penthouses.

The former office block was bought for £20 million in 2006.

The development had originally been tabled to be the off-site “affordable housing” element of a much larger project — two Victorian hotels in Kensington High Street bought for £69 million.

The hotels were to be transformed into flats worth up to £10 million each, despite opposition from local residents.

But before the building plans got off the ground last year, members of the Abu Dhabi royal family bought the Kensington site for £320 million.

The buyers did not purchase Kingsgate House and the building has remained part of Christian Candy's property portfolio, owned by a Candy Brothers subsidiary company, Kings Fern Ltd.

A spokesman for the company said the development will begin next year and will include 14 “affordable housing” flats.

A council spokesman added: “Planning permission was granted because it is a high -quality building which includes an element of affordable housing.”

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