Building up a sex empire

Michael Chow has his eye on Auckland's biggest penthouse apartment, at Princes Wharf. Photo / Doug Sherring

Undeterred by the demise of the Palace Hotel, the Chow Bros adult entertainment magnates want to build a billion-dollar empire in Auckland - beginning by opening pop-up brothels in time for the Rugby World Cup.

The glamorous flagship of their sex empire could be Auckland's biggest penthouse apartment, atop the Hilton Hotel in the Viaduct Basin.

Michael and John Chow confirmed they had expressed interest in buying the Princes Wharf penthouse, owned by cash-strapped developer David Henderson and on the market for $10 million.

The 880sq m property boasts six bedrooms, each with a marble en suite. A self-contained guest wing has its own infinity pool, and two private lifts connect the apartment with 12 underground carparks.

The Wellington-based brothers say they have $100 million to invest. Their first foray into Auckland was stymied when their renovations to the historic Palace Hotel on Victoria St led to cracks appearing in load-bearing walls.

Auckland Council moved in quickly, tearing down the hotel that same day - to the fury of the Chows, who are threatening to sue.

But they have also moved on to new business plans.

Michael Chow disclosed his interest in the Viaduct penthouse to the Herald on Sunday, although he would not be drawn on the details, citing commercial sensitivity.

"It's not a done deal so I can't say too much," he said.

He indicated that he regarded Henderson's valuation of $10 million as laughable. "It's leasehold land, you can't pay $10 million for that," he said. The brothers' offer would be around half that.

The marketing campaign for the apartment ended last month and it is understood one tender and four expressions of interest were received. Henderson said he was working through the options and hoped to finalise a sale in the new year.

Operational costs for the property, including ground rent and rates, are more than $3000 a week, or $170,000 a year.

Auckland Council resource consent spokesman Ian Dobson said a person wanting to set up a brothel in the Princes Wharf area would have to apply for resource consent.

Chow said it would not be financially viable to run a brothel out of the penthouse in the long term, and the brothers were more likely to use it as an Auckland residence.

But he was cagey about its short-term use during the Rugby World Cup next year, when he plans to open temporary premises to cater for rugby fans. Asked whether the penthouse would be one such brothel, he said: "I can't say anything until January 10."

The brothers and their business partners have a $100 million business empire in Wellington, which includes adult clubs Il Bordello and the Mermaid, each of which has a brothel or escort service.

They created their business empire from humble beginnings, taking over their parents' takeaway shop in Lower Hutt.

"I think all the businesses are the same," Chow said. "Same theory pretty much - running a restaurant is no different to running a club."

The Mermaid has strippers who swim in a large wall-mounted fish tank and a brothel that charges out prostitutes at $240 an hour with a cash discount. An Il Bordello call girl will charge $280 for an hour's visit; two "bi-curious women" are $580 for an hour.

Chow said the brothers were set on taking over the Auckland sex industry to cash in on the Cup.

He said 70 per cent of customers at his Wellington clubs were tourists and he would open as many Auckland brothels as "the market will take" - with at least one open by February.

"I think there's a market for professionally run clubs. Customer service is pretty average here. Here, I have to ask for another glass of water," he said.

"We like to add value to things. If you can add value, you make more money."