Sex sells: But would you buy a brothel?

Brothels have struggled to trade in the past couple of years. 

COVID lockdowns, a rise in illegal massage parlours and the availability of sex online has left many in the industry reeling, with some operators selling up their premises and getting out of the business altogether.

A steady stream of brothels – located most often in industrial areas – have come on the market since the first COVID lockdowns and some have found themselves in the hands of unlikely buyers.

In Queensland, Cairns’ only legal brothel, Northern Belle, which opened to great fanfare in 2006, was forced to close its doors in 2020 and was put up for sale in mid-2021. It sold earlier this month … to Autism Queensland. Autism Queensland did not respond when contacted by realcommercial.com.au for comment.

The courtyard was used for entertaining in the past. Picture: realcommercial.com.au/sold

The organisation is set to refurbish the 550sqm, 12-room property and use it as a day centre for special needs children, selling agent Rob Macfarlane of Frank Knight said.

“The brothel owner had decided to retire,” Mr Macfarlane said. 

“We did have one enquiry from someone in the sex industry but they never followed through.”

He said the main interest came from buyers looking to turn the building into a medical centre or offices. “Being on an industrial state in the suburbs was a bonus,” he said.

Zoning is key

Dax Roep of Harcourts Coastal is selling a purpose-built brothel in Ballina, NSW. Expressions of interest closed last week and there had been strong interest from around the country with four written offers  which were so close you “‘could throw a blanket over them”. 

Part of the attraction was the long-term lease and income – around $110,000 a year. That, and the zoning.

11 Cava Close has plenty of parking. Picture: realcommercial.com.au/for-sale

The 415sqm building on 1325sqm was purpose built in 2005 by the current owner in an industrial area and had been operating as a licenced adult entertainment club since.

 “Brothel zoning is as hard as it gets,” Mr Roep said. “So for a business, being able to repurpose the property is not as difficult.”

That’s the key to anyone looking at brothels, said Ray White Commercial’s Head of Research, Vanessa Rader.

“Just because it’s a brothel now doesn’t mean it has to be forever,” she said.

 “It can be converted to accommodation, office, retail – almost anything.”

She said a brothel is just like any other hospitality asset and while hospitality assets had been affected by the pandemic, their performance will improve.

“It’s about the quality of the asset,” Ms Rader said. “Investors are always looking for yield, long term potential, land size.

“There will be those who prefer not to buy these kind of establishments but plenty of investors will be aware of the longer term play. They get a reliable source of income for now and an opportunity to redevelop down the track.”

Long term appeal of brothels

The longer term play was front of mind for the buyer of Centrefolds brothel in West Gosford, on NSW’s central coast.

The brothel started life as offices but for now will be staying as it is. Picture: realcommercial.com.au/sold

The property at 6 Stockyard Place sold in November 2021 and the buyer was happy for the brothel to stay.

“It’s on an acre [0.4ha] and he’s happy to land-bank it,” agent Michael Chatfield, of Central Coast Commercial, said.

The brothel has a three-year lease but at the end of that, the owner would be looking to redevelop. 

“The building originally was offices, then was converted to a brothel about 25 years ago,” Mr Chatfield said. “Demand for office space in this part of Gosford is non-existent.”

For now, the brothel, which has been renamed, will stay and the owner has leased out the land behind to another tenant.

In Melbourne, another brothel owner is selling up and getting out, leaving behind a seven-bedroom, five-bathroom mansion on 2284sq m of land in Coburg North with an asking price of $2.6million.

The current owner is willing to thrown in furnishings to any buyer. Picture: realcommercial.com.au/for-sale

Skad Real Estate Thomastown sales consultant Rahul Malik said the Crystal Lodge owner – who is planning to retire and travel around Australia – was prepared to leave behind some of the furniture, such as a pool table, desks and office items for the building’s new owner.

Mr Malik said there had been interest from around the country for  61 Trade Place with potential buyers expressing an interest in converting the building into offices for an engineering business, and an AirBnB.

He said with Victoria decriminalising sex work in 2023, it would make sense to use the property for something different.

While there are around 400 licensed brothels in Australia, it was unclear how many sold each year and what became of them.

“Plenty of brothels are sold off market,” Ray White’s Vanessa Rader said. “It’s not your normal purchase where you can plonk a big sign in front of it and do walk throughs.”