The land was resumed and the buildings were demolished by the government in the mid 1890's due to insanitary conditions of the area being responsible for the plague epidemic.
Full report on resumption by the Government dated 11th August 1896 online here (click link twice)
The report of Colonial Surgeon Dr Ayres in 1875 referred in strong terms to the insanitary state of the town areas, including the keeping of pigs indiscriminately in dwelling houses. This report was apparently suppressed until 1881 when it was published as a reprint of parliamentary papers. Thereupon Mr Chadwick was appointed by the Secretary of State for the Colonies to come out and report on the sanitary state of Hongkong. These suggestions were published in 1883.
Built in the gardens of the civil hospital and replacing a temporary matshed. The main building consisted of two blocks of 4 beds each surrounded by a verandah. Coolie Quarters, with accommodation for 10 coolies, was built on a lower terrace adjacent to Eastern Street connected to the main block by a covered walkway.