The highly publicised renovation and extension of Sorrento’s Continental Hotel has paused due to market factors.
The site owner, Continental Hotel Group, confirmed the news, which was first mooted – save for name and address – by a 3AW Rumour File caller prior to Easter.
“Continental Hotel Group is currently in the process of securing senior construction funding to finance the next stage of construction and is in discussions with major funders to secure this finance,” the consortium’s general manager, Duncan Thomson, told realestatesource.com.au in a statement.
Funding is expected to be secured in the third quarter, Mr Thomson added – which is when building works should recommence.
“Continental Hotel Group is committed to delivering the Continental Hotel as a world-class luxury hotel and hospitality venue that will attract visitors to the peninsula year-round despite the shift in initial project timelines due to the current market”.
Construction funding difficulties have become a hallmark of the property market this year with developers across the state affected.
The $80 million refurbishment and extension of the Sorrento site is being undertaken by local developer Steller along with Julian Gerner’s Melbourne Pub Group.
Mr Gerner paid a reported $13 million for the hotel at 1-21 Ocean Beach Road in 2013, but never traded from it.
Shortly after the purchase, the publican paid the Mornington Peninsula Shire Council $1.98 million for an adjoining car park – increasing the land holding from 3579 square metres to 4482 sqm.
Mr Gerner then obtained a permit to part-demolish some buildings and construct seven storey structures with apartments, a 38-suite hotel, wellness centre, yoga deck and pool.
In November 2017, Mr Gerner listed the permitted site for sale as a whole, for a speculated $20 million.
That unusual sale campaign also called for co-investors to deliver the redevelopment with Mr Gerner who would consider leasing part of the re-opened venue from a new owner.
Steller bought in as joint venture partner about two weeks later – the period widely considered to be the peak of that property cycle.
Construction of the proposed redevelopment beginning received widespread media coverage last October.
A public bar and bistro was expected to open as part of a soft launch five months from now.
For 25 years until Mr Gerner bought it, the Conti, as it is often dubbed, was owned and occupied by the Di Pietro family.
Believed to be the only four-storey limestone structure in the southern hemisphere, the National Trust listed hotel was developed by actor and politician George Coppin in 1875.
In a separate statement, Steller said it is re-weighting its portfolio into retirement and aged care living.
“The diversification into aged care and retirement living has been fast-tracked by the recent permit approval for our first co-located aged care / retirement living site at Graham Road, Highett”, a spokesperson said.
“Our focus for the next two to five years remains on our fast-growing retirement and aged care living portfolio. We remain hugely optimistic about these sectors and see immense growth potential in these booming markets”.