AshbyCapital has emerged as the frontrunner to buy Kaupthing’s 50% stake in Fitzroy Place, WC1, for around £218m – a 4% yield.

It will be the second major West End  mixed-use scheme the UK company has bought into. The business was founded by Peter Ferrari, formerly of Heron International, in 2013.

Kaupthing appointed CBRE to market its share of the development, which it jointly owns with Aviva Investors, in August.

The bank, which was nationalised in 2008, can now exit the scheme following the completion of the development’s business plan.

Fitzroy Place comprises 220,000 sq ft of fully-let offices across two buildings. The larger 140,000 sq ft building, 1 Fitzroy Place, is the new UK headquarters of cosmetics giant Estée Lauder.

There are also 295 flats, 235 of which are private units. All but one have been sold.

The scheme has been managed by Exemplar since Aviva bought a 50% stake in 2009 for £156m.

It sits on the site of the former Middlesex Hospital, which was due to be developed by the Candy Brothers’ CPC Group and Richard Caring. But the project stalled at the onset of the financial crisis.

AshbyCapital is also working with Exemplar and the Bedford Estate to redevelop One Bedford Avenue, W1, a 115,000 sq ft site comprising two retail and office buildings fronting Tottenham Court Road. It also forward funded U+I’s £60m speculative office development, 2 Brunel Place, next to Slough Station, where Crossrail is expected to start operations in 2019.

Earlier this year, AshbyCapital announced a raft of appointments, reflecting the firm’s increased activity.

Total capital deployed by the firm will exceed £900m after this deal.

Savills is acting for AshbyCapital.