A foreclosed property near Mong Kok MTR station which provides a high rental yield of nearly 10 percent has attracted significant interest at a recent auction.
The 224-square-foot unit, which was listed for HK$2.28 million, is said to generate HK$18,000 in monthly rent.
However, an investigation by Sing Tao Probe revealed that the unit was located in King Hing Building, one of Kowloon’s most notorious “compensated dating” buildings.
Apart from a badminton equipment store and a few residential and guesthouse units, over 80 percent of the building consists of compensated dating establishments.
The unit had been split into two separate suites and was leased to individuals, rather than to a company, the auction house said when reached by Sing Tao Probe. It also confirmed that the place is used for adult entertainment.
But the auction house staff said the tenants are reliable and pay rent on time. It was also revealed that once the lease expires in August this year, the rent can be increased by 10 percent according to the agreement.
While the property had not been flagged or seized by authorities, banks were unlikely to approve a mortgage due to the building’s reputation, the staff warned.
Despite the concerns, demand remained strong, with the property eventually selling for around 10 percent above its asking price.
STAFF REPORTER
King Hing Building. Sing Tao
