Gentleman’s club market sees boost in action

Mt Isa’s only legal brothel is currently on the market.

Brothels might not be the first choice for many commercial property investors, but agents say they make surprisingly astute buying.

Support for the niche asset class comes as the market continues to heat up, with the premises of one of the Gold Coast’s newest brothels being sold for $1 million.

The deal is the latest in a string of brothels coming to the market, including the Sunshine Coast’s first legal brothel Scarlet Harem, which has been put on the market just a year after the business was named ‘Best Brothel Overall’ at the Australian Adult Industry Awards.

Meanwhile in Mt Isa, the 450sqm premises of the town’s only legal brothel has been listed with City and Country Realty, asking about $500,000.

Like the Scarlet Harem, the eight-room brothel at 14 Traders Way is fully set up but unoccupied, which means the new owners of both properties will need to find a licensed tenant or operate on an owner-occupier basis.

The brothel's operator will need to secure a licence.

The Mt Isa brothel’s operator will need to secure a licence.

While brothels are not a mainstream investment choice, agents say the premises they occupy can still be a good investment opportunity because the niche assets can often result in higher returns.

Ray White Commercial (Gold Coast South) commercial sales and leasing consultant Tony Grbcic says while there can be resistance and lending difficulties with banks in regards to assets leased by brothels, they can also offer a secure tenure.

“The Queensland Prostitution Act is so stringent with licenses, that the business operates with limited competition in the immediate area,” Grbcic says.

“Investors recognise that the asset is protected having both the licence from the Queensland Prostitution Act as well as local council authority to operate from a town planning perspective.”

Grbcic worked alongside his colleague and son Adam Grbcic to secure the sale of the 400sqm building leased to Secret Liaisons, which was previously known as Black Orchid.

One of the Scarlet Harem's themed rooms.

The Scarlet Harem brothel is one of a number currently on the market in Queensland.

Located on a 2031sqm site at 12 Greg Chappell Drive, Burleigh Heads, the property was sold to a private investor on behalf of a private owner on a net yield of 8.7 %.

Adam Grbcic says the property is secured by a new three-year lease to the Secret Liaisons club in the Burleigh industrial precinct.

“The property was an ideal investment opportunity as it is returning net rental income of $87,476 per annum plus GST and outgoings,” he says.

“We had ample parties interested in just the land as well.”

Adam Grbcic and Tony Grbcic sold the same building for $850,000 two years ago in June 2014.