Sorrento’s Continental Hotel hits the market with $150m price hopes
A consortium of wealthy developers has listed the Continental Hotel and workers’ lodgings on the Mornington Peninsula outside Melbourne with hopes of a $150 million price tag in one of the biggest hotel listings to hit the market this year.
The 150-year-old building in Sorrento underwent a $120 million renovation nearly four years ago by owners including Victor Smorgon Group – the family office of the wealthy Smorgon family – along with the family-owned Kanat Group, and developer Trenerry Property Group, led by Robert DiCintio.
Included in the offering is the 108-room InterContinental hotel, its various dining venues and event spaces, an underground carpark and Aurora Spa & Bathhouse founded by Lyndall Mitchell.
A listing of the hotel was previously expected at the end of last year with a price tag of about $180 million, but did not eventuate.
Now, the hotel and Sorrento Lodge, an affordable 76-bed accommodation facility developed to house hospitality staff, is officially up for grabs through a sale-and-leaseback basis for a combined $150 million. JLL and Cushman & Wakefield are managing the current campaign.
“In terms of assets that have come to market, this is right up there with the landmark sale of the Park Hyatt Melbourne earlier in the year,” JLL’s Peter Harper told The Australian Financial Review. “The vendors are primarily developers, the divestment is part of their plan.
“They took the asset on a few years ago and undertook an incredibly extensive renovation and extension of the asset, and have now got it up trading, and now is the right time to exit.”
Harper expected the hotel listing to garner both local and international interest.
“When you look at the dollars that have been invested in real estate throughout the Mornington Peninsula on residential alone, it speaks to the wealth and the prestige, reputation of investments in that area,” he said.
“This is the sort of asset that a lot of offshore groups would seek to get just given the rarity and genuine trophy status.”
Kickon Group’s Craig Shearer and celebrity chef Scott Pickett have overseen the building’s food and beverage offerings for the past three years. However, their partnership is in the process of winding up, and Kickon Group will be operating Ember – the newly rebranded fine-dining restaurant formerly known as Audrey’s – on its own.
“We’ve got a long tenure ahead of us and we love operating such an iconic Victorian venue, and look forward to many more years ahead,” Shearer told the Financial Review. “Next week, we’ll be reopening as Ember, with the high-end steak and seafood restaurant.”
Administrators were appointed for two of Scott Pickett’s companies earlier this year, including Rogue Traders Group, which controls restaurants such as Matilda, Chancery Lane and Longrain in Melbourne.
The Continental consortium purchased the property from receivers for about $14.5 million in April 2020 after a planned $80 million project was abandoned following the collapse of developer Steller, with the hotel left precariously overlooking a large excavation.
In 2021, the consortium struck a deal with global hotel giant IHG to operate the property under its luxury InterContinental brand.
“We anticipate strong interest from both domestic and international investors, given the property’s prime location, quality tenants and enduring appeal as a year-round destination,” Cushman & Wakefield’s Daniel Wolman said.
