The highly publicised renovation and extension of Sorrento’s Continental Hotel has paused due to market factors.
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.
“CHG 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, he added – which is when building works should recommence.
“CHG 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 financing difficulties have affected developers across the state this year.
The $80 million Sorrento works are being undertaken by local builder Steller with Julian Gerner’s Melbourne Pub Group – the latter who paid c$13m for the hotel at 1-21 Ocean Beach Road in 2013 but never traded from it.
Shortly after the purchase, the Mornington Peninsula Shire Council sold the publican an adjoining car park for $1.98m – increasing the Continental Hotel land holding from 3579 square metres to 4482 sqm.
A permit was then obtained to part-demolish some buildings and build seven storey ones containing 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 (story continues below).
The pair’s redevelopment began with media fanfare 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 owner-occupied by the Di Pietro family.
Believed to be the only four-storey limestone structure in the southern hemisphere, the National Trust listed property was developed by George Coppin in 1875.
Focus changing to aged care: Steller
In a separate statement, Steller said it is re-weighting its portfolio into retirement and aged care living.
“The diversification into [this sector] 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 added.
“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”.