Australia’s former top brothel joins churches, childcare on hot property list: Ray White

A brothel for sale at 8 Yiannis Court, Springvale, has had the eye of investors since it hit the market late last month.

Australia’s one-time best brothel has come onto the market as a leading commercial property expert revealed sex dens have joined churches and childcare centres on investor shopping lists.

Ray White Commercial head of research Vanessa Rader recently revealed the alternative properties were very much in investors’ sights, as were carparking facilities, boarding houses, storage sites, petrol stations and even caravan parks.

Investors stepping outside of the residential property market for the first time were even more likely to home in on boarding houses, Ms Rader added.

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“Boarding houses are seeing competition from more traditional investors going up against the mum and dad investors,” she said.

While investor lending is declining, and commercial investment is “a shadow of what it was in the past 12 months”, she said part of this was down to budgets being smaller after interest rate hikes — which works in favour of some of the more unusual, and often cheaper, properties landlords can own.

In an industrial estate setting, 8 Yiannis Court, Springvale, a brothel is surrounded by some of the hottest property on the market today: warehouses.

“This has really grown during Covid, but it has continued,” Ms Rader said.

“With low interest rates they were looking at more unusual options; because they are a bit more affordable and that is why it is continuing now.

“There would definitely be investors who are looking for something unusual that’s a bit weird, rather than residential property.

“And if these sorts of assets come to market in this current cycle, they will look more affordable than others.”

Ms Rader added that while some investors were turned off by sites such as brothels or cemeteries, that often meant their values were a bit lower than other similar properties with different purposes nearby and could come with a lower price tag as a result.

Scope to develop or repurpose them later on could often easily add to their value.

Crabtrees Real Estate’s Saul Akoka is currently selling a brothel in Springvale and said the 8 Yiannis Court property was his first in the category, but could have fairly broad appeal.

The brothel is securely tenanted into next year with a further five-year option.

It’s currently returning more than $135,000 a year with a lease that ends next year, though has a further five-year option to the current tenant.

The business has been in place since 1997 and was awarded Best Brothel in Australia in 2019, according to its listing on realcommercial.com.au

On its website, the business touts its gong as the inaugural winner of the award issued by the Australian Adult Entertainment Business Industry Awards — the X Awards Australia.

In addition to customer satisfaction, the award also recognised the bordello’s support of sex workers and positive reviews from them.

In addition to the rental income, the property offers a 500sq m building on an about 900sq m block. It has six rooms, two spas, gated parking and security systems. It also has a 10kW solar power array.

Mr Akoka said the property was likely to sell for about $2.1m-$2.2m, leaving an about 6 per cent yield based on the property’s current lease.

“Anything above 5 per cent is good,” he said.

There are two spas in the building, and a shower in each of its rooms.

Mr Akoka added that the property was surrounded by warehouses, which in Melbourne’s south east had been selling for figures “akin to house prices” this year.

He said one in Clayton South transacted earlier this year for $1.3m.

“That would be a normal residential block in Bentleigh or Caulfield or Moorabbin,” he said.

With the Yiannis Court property he said investors were likely to look past the tenant to the numbers, with a yield close to 6 per cent expected likely to appeal to many.

“People will look at their budget and then after that it will be the price and the lease,” Mr Akoka said.

“Anyone who is an avid investor will have a look.”

Expressions of interest in 8 Yiannis Court end on July 28.

Meanwhile a former regional Victorian church at 52 Memorial Rd, Glenthompson, is currently for sale with a $360,000-$390,000 asking price.

A former church at 52 Memorial Rd, Glenthompson, is up for sale today with the next owner likely to transform its use.

Elders Ararat’s David Jennings is handling the listing and said its current owner had planned to turn it into a gallery, but had changed their plans and was selling.

He said the next owner’s plans could cover any range of options, but would likely not see it used as a church.

CBRE healthcare and social infrastructure director Sandro Peluso said childcare centres were in such high demand in Victoria one had set a new record for the property type earlier this year.

The 117A Kooyong Rd, Armadale, property sold for $20.5m.

Mr Peluso said it reflected a 4.6 per cent yield for the buyer, and that on average yields for the sector were declining.

117A Kooyong Road, Armadale, sold for $20.5m earlier this year as demand for childcare centres soars.

“The Armadale transaction is a testament to the strong and unwavering investor sentiment toward the early learning sector, in combination with an appreciation for the value of existing centres in a rapidly rising construction cost environment,” Mr Peluso said.

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