Glamour returns to Mayfair: UK Property Shop News

There will be one huge glamorous hole in the ground to fill - if demolition is allowed. Probably the biggest opportunity the area is ever going to have to put up the poshest property in town. There will be bids going in for the 999-year lease on their former home said to be easily worth £500 million, even in these recessionary times.

The Candy brothers have confirmed their interest in the building. West End property agent Cushman & Wakefield is handling the sale, though any deal requires the approval of the US Congress.

At present, the 50-year-old embassy occupies the entire western side of the square and is held on the 999-year lease, granted in the Fifties by freeholder Grosvenor Estate. From the outset, the building was controversial. Designed by Finnish architect Eero Saarinen in "modern imperial style", it is a hard contemporary presence in a mainly Georgian and neo-Georgian neighbourhood.

Pretty townhouses on Mayfair's Charles Street
Following 9/11, ugly makeshift barricades around the embassy sparked a dispute with well-heeled, well-connected local residents, who complained that the fortress environment patrolled by armed police made them a terrorist target.

The embassy is not listed, which will help any redevelopment proposal. If demolition is ruled out, converting the building into luxury flats would be a complex architectural challenge as three of the embassy's nine floors are underground. For this reason, a hotel or office development, or perhaps a mixed scheme including residential, may emerge as favourite.

The area has been moving back to residential since the mid-Nineties, and to date more than 250 office buildings have become homes.

Some property experts question whether the time is right to bring forward such a scheme, arguing that the super-flats bubble has been burst by the credit crunch. But as the embassy move to Nine Elms is to take up to five years, the thinking is that the property market will be very different, and probably very active and upward.

Mount Street is a fashionable neighbourhood hub
New flats in a scheme called The 21st have been built above Cipriani restaurant on Davies Street and coming soon is the biggest residential project for a generation: 39 flats in a mixed-use redevelopment of Park House, opposite Selfridges.

Today, Mayfair is less the hushed enclave of the shy wealthy and more a conspicuously fashionable, even blingy, place. Grosvenor itself has a wider strategy for Mayfair. The estate is keen to acquire buildings that it sold off during the post-war period and cultivate new neighbourhood hubs, such as revitalised Mount Street, with its upmarket fashion boutiques, where retail rents have tripled since 2005.

Another pocket earmarked for improvements is the area around Brown Hart Gardens, by Duke Street. At the moment, this is one of Mayfair's less salubrious parts, backing on to Oxford Street and with a collection of artisans' dwellings (Peabody flats). Brown Hart Gardens itself is one of the capital's secrets, a raised public space built above an electricity sub-station and "fenced" by classical stone pillars and listed domes. This lowest-value part of Mayfair is an area to watch.

Though Mayfair is one of the few places in central London where the super-rich can find a grand town house with servants' quarters, there are plenty of less-opulent homes including mansion flats and mews cottages, even a few ex-council flats. Prices start at about £500,000 for a small pied-â-terre.