Sorrento’s troubled Continental Hotel development for sale

EXCLUSIVE

Sorrento’s Continental Hotel is for sale, again.

The property is a construction site – and an empty one at that – after the co-owners, including troubled builder Steller, stopped work on an $80 million redevelopment in April citing funding issues.

When we reported about constructing ceasing, the owners asserted that they planned to recommence in the third quarter.

However rumours the high-profile hotel would be touted for sale were rampant.

An aerial image of the site (outlined) used in the 2017 marketing campaign calling for buyers, or joint venture partners.

This week, it is confirmed Colliers International brokers Guy Wells, and Trent Hobart are running a marketing campaign.

Industry sources value it at about $25 million. It is anticipated a further approximate $40 million would be required to complete construction.

The agency declined to comment about any campaign, when contacted.

The Continental Hotel, at 1-21 Ocean Beach Road, last sold in 2013 for $13 million to restaurateur and publican Julian Gerner.

Shortly after, Mr Gerner spent another $1.98 million to buy a neighbouring car park, creating a 4482 square metre super-site.

Mr Gerner later obtained permission to replace land around the historic four-storey limestone pub with apartments, a hotel and hospitality spaces in buildings of up to seven levels.

In late 2017 – the peak of the last property cycle – Mr Gerner listed the permitted project for sale asking $20 million.

Two weeks later, however, Mr Gerner decided to retain an interest but embark on a co-development venture with Steller – creating a consortium known as Continental Hotel Group.

Last October, CHG began the rebuild.

The first stage of the redevelopment was set to be unveiled this September.

The Continental Hotel was never re-opened after Mr Gerner bought the site from the Di Pietro family, which owned and operated it for the previous 25 years.

Built in 1885 by actor and politician George Coppin, the distinctive pub is heritage protected.

Steller, meanwhile, has suffered a high-profile fall from grace in recent months, with construction at several sites halted, and rumours that it has failed to settle on acquisitions.

Steller director Nicholas Smedley.

The local developer, whose website is no longer active, is headed by Nicholas Smedley.

It is currently selling numerous sites including the former Greyhound Hotel in St Kilda, and an office at 200 Wells Street, South Melbourne, which it bought permit-ready for an apartment tower.

This week it listed a high-profile hillside block in East Keilor earmarked for 47 townhouses.

Last month we reported that Mr Smedley sold a Glen Iris family home for $8.05 million, a year after he bought it for $9 million.

A business partnership with Simon Pitard, also dissolved, as Steller wound up its commercial and residential operations, it said, to focus on the aged care sector.

The Glen Iris home, on a 2000 square metre plot, set a suburban price record when Mr Smedley bought it for $9 million last year.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco
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