Sorrento's Continental Hotel back on the market following court decision
The Continental Hotel in the Victorian seaside town of Sorrento is back on the market for the second time in a year following a decision by the Supreme Court of Victoria.
The heritage-listed property has been mired in financial woes following its purchase in 2015 by hotelier Julian Gerner. Mr Gerner had intended to redevelop the site but took it back to market in 2017 with a planning permit in place when he was unable to finance the redevelopment.
That sale was canned after a subsequent joint venture agreement was struck between Mr Gerner and now collapsed developer Steller to proceed with redevelopment of the site.
Following the collapse of Steller in 2019, the property was sold to LBA Capital for a reported $21 million. However, LBA was unable to settle when the Supreme Court of Victoria moved to freeze LBA Capital’s cash and real estate assets after its South Korean-based financiers alleged the developer breached its loan obligations.
In October last year it was reported that Mr Gerner was intending to take over LBA’s contract on the 145-year-old building, which has been gutted inside, and continue the development – reported to be worth around $100 million – himself.
However, a decision by the Supreme Court last week to end that contract and release LBA’s deposit on the property signals the end of that possibility and sources with knowledge of the deal confirmed Mr Gerner was no longer involved with the property.
The property is now under the control of receiver Petr Vrsecky, partner at PKF Melbourne, who has been appointed by Manda Capital Holdings, which holds the first mortgage on the property.
“We are pleased and relieved the matter has been brought to a head, and that we can now move forward with the sale of such an illustrious property,” Mr Vrsecky said.
“The previous contract of sale is at an end, and we welcome all expressions of interest through Colliers,” he added.
Colliers International’s Guy Wells has been appointed to handle the sale, advising that the expressions of interest campaign would commence in the next week with a likely closing date of “mid to late April” and all offers to be considered.
Mr Wells said the sale by receivers represented an ideal opportunity for interested parties to purchase an iconic Mornington Peninsula property secure in the knowledge that any contractual claims to the property had been settled.
“The appointment of a receiver means the property will be sold and it gives individuals, investors and developers the opportunity to bring the Continental back to life,” Mr Wells said.
With no work done to the property since Steller’s collapse, a new owner could choose to recommence work at the hotel, which has been closed for more than two years, under the existing DA for a luxury hotel, dining and events centre.
Alternatively, the new owner could seek to amend the DA for the property, according to Mr Wells.
“Ultimately it’s up to what a purchaser decides to do with the site [but] once it is developed it will be an awesome pub for the local community,” he said.
