CONTI UP FOR GRABS AS STELLAR GOES UNDER

In On the Market by Clyde MooneyLeave a Comment

Click here to share this article with a friend

The future of Sorrento’s majestic Continental Hotel is in the wind with the property reluctantly returning to market as developer Stellar winds up.

Hotelier Julian Gerner moved to Sorrento, on the Mornington Peninsula, in 2013, with his wife, to start a family.

He already boasted a half-dozen heritage hotel projects under his belt, and purchased The Conti for around $12 million. Built 1875 from local limestone, it is the largest limestone structure in the southern hemisphere and a cultural icon of the Peninsula.

The Conti is listed with the National Trust, and for the prior 21 years was the pride of owner-operators the Di Pietro family.

Gerner lodged a DA for a large project, involving a full make-over of the iconic pub and refurbishment of its 24 heritage rooms, as well as construction of 16 residential apartments and around 40 traditional hotel accommodation rooms at the rear. The Hotel closed for trading in late 2017.

Market conditions and a desire to see it optimised saw the former Melbourne Pub Group director look to the market for a new owner to take on the extensive project, resulting in a joint venture with Nicholas Smedley’s Stellar Group announced in November 2017.    

Julian Gerner & Nicholas Smedley

After more planning and approvals, work began in earnest in late 2018, the venture flagging an even bigger $80 million undertaking. This was to bring 38 rooms of five-star accommodation in stage one, and another 61 rooms, as well as a wellness centre, whisky bar and restaurant for stage two, slated for completion in 2020.

The Conti holds the highest level of heritage protection due to its historical significance, and the highest consideration was given to restoration of its features. Street level is to offer the public bar and bistro, the second level will see revival of Art Deco interior features to become a fine-dining restaurant, and level three will get three function rooms.

The completed value of the project was estimated at around $150 million.

But in May work ended, with workers deserting the site. It emerged Stellar’s founding partners Smedley and Simon Pitard had determined to split amid tighter construction financing constraints squeezing developers across the state.

Although the company says it will deliver projects already on the market or under construction, Stellar has dismissed all its staff and begun a major sell-down of its undeveloped properties, bringing The Conti back to market in its wake.

Local community groups have been vocal throughout the planning stages and objections are rising to a crescendo as the site sits dormant and exposed to weather, with a large hole excavated behind the heritage hotel.

On Sunday (30 June) a crowd of more than 300 people met at Sorrento Community Centre to discuss the future of the development. Gerner was amongst those that spoke. 

“I have worked tirelessly on the project for more than four years and have been granted heritage and planning permissions to deliver the vision of retaining, restoring, preserving and celebrating this iconic Victorian asset,” he said.

“To date, $40m has been invested on planning, designing, purchasing, financing, stabilising and restoring the heritage building, as well as the commencement of new building works that ensure the commercial viability of the project.”

Gerner outlined works already undertaken at the site, including completion of underpinning, structural rectification and rendering, and repairs to the fragile limestone.

He explained to the crowd how he continues to work closely with Mornington Peninsula Shire and Heritage to ensure obligations are met and the site is maintained appropriately.

The Hotel is to be sold with plans and permits in place, with the purchaser legally obligated to honour the previously secured permit under the strict controls governed by the Heritage Act. Material changes to the planning permissions will not be possible without starting the process again.

“I will be working closely with the agent, to secure a buyer that can deliver the vision, complete the restoration of this iconic asset and deliver it back to the people of Sorrento and the state of Victoria.”

Colliers International’s Guy Wells and Trent Hobart have been engaged to sell the property, at 1-21 Ocean Beach Road Sorrento, with an adjoining site at 23 Constitution Hill Road. The two titles comprise 4,482sqm, with Commercial 1 zoning.

Market expectation is for a sale price around $25 million.

“This is a rare chance to be the custodian of an iconic Victorian landmark and leave a legacy in one of the state’s most popular and frequently visited beachside tourism hot spots,” suggests Wells.

“The proposed development will see the existing heritage hotel retained and celebrated.”

The Continental Hotel is for sale by International Expressions of Interest, closing Friday 26 July.

Leave a Comment

Click here to share this article with a friend

Share this Post:

 

Keep up to date.
Get our FREE newsletter:

 

Current Stories: