D2 Private, the acquisitions vehicle set up last year by Arnold, former Quinlan Private executive Deirdre Foley and Brendan O'Mara, was beaten in the end by Capital & Counties, the commercial property investment and development arm of publicly quoted British property giant Liberty International.

The 35 buildings in the Covent Garden, which include the piazza's market building and a number of boutiques, restaurants, cafes and bars, were sold by Scottish Widows and Henderson Global Investors for over £400m ( 585m), representing an initial yield of less than 3.5%.

D2 Private is on an ambitious expansion spree in the British property market. Already this year, Arnold has paid over 470m for the Woolgate Exchange building in the City of London and 86m for a Mayfair office building.

Last year, he paid 200m for Marks & Spencer's headquarters in London, and lost out in a bidding war for 33 Cavendish Square, which was sold to the Abu Dhabi royal family for 625m . . . more than 160m over the asking price.

"Naturally we are disappointed that we are not the successful bidder and we'd like to thank our advisers and our bank, Anglo Irish Bank, Norton Rose and King Sturge, and our team in D2 Private for all of their hard work in respect of the transaction over the last couple of months, " said D2 Private chief executive Deirdre Foley.