Investing in the pet boom: the rapid rise of veterinary real estate
Pets have taken on a very different role in Aussie households over recent years, going from backyard companion to beloved family member – and the industry surrounding them has grown rapidly in response.
According to Animal Medicines Australia, Australians spent just over $21 billion on their pets in the 12 months to March 2025 and have some of the highest pet ownership rates in the world, with 73 per cent of households now including at least one pet.
That spending boom is now translating into expansion across veterinary assets.
“The market is very strong at the moment – demand is growing at high single to double-digit rates,” says Bruce Dixon, managing director of Apiam Animal Health, which operates more than 70 vet clinics nationwide.
“Despite cost-of-living pressures, we’re not seeing that in our business at all. People treat pets like their kids, and they’re willing to pay to keep them well.”
That strength in demand is drawing investor attention, with veterinary assets proving attractive thanks to their long leases and defensive yields. According to Burgess Rawson, yields for vet clinics and similar assets tightened from 6.31 per cent in 2023 to 5.94 per cent in 2024 – a clear sign of investor confidence and a result broadly comparable to traditional healthcare property.
“Vet clinics are essentially in line with medical centres – we consider them a healthcare asset,” says Shaun Venables, senior director at Burgess Rawson. “The yields on vet clinics would be on par with good medical centres.”
Ben Marcos, co-founder and general manager of veterinary property advisory firm BusiVet, says the physical format of vet clinics has shifted, too.
De novo vet clinics are now becoming the norm – brand-new facilities that integrate consultation rooms, surgical theatres and advanced diagnostic equipment. The trend mirrors the evolution of healthcare real estate, which has seen rising investor appetite for premium assets.
“The industry’s gone through a bit of a renaissance, moving away from the cottage converted home to purpose-built facilities,” he says. “Pretty much every clinic now is a purpose-built facility because of the expectations pet owners have.”
For landlords, the stability of a veterinary tenant is hard to ignore: “Veterinary tenants are generally a pretty easy sell because they’ve got strong lease covenants,” says Venables.
They also require highly specialised premises, including medical-grade fit-outs, dedicated surgical suites and strict regulatory compliance.
“Anything that’s medical is heavily regulated and needs to be up to standard, so tenants are constantly investing back into the property,” he adds.
Tenants are likely to be stickier, too, given the complexity of relocation. “Some of the clinics we’ve sold have been in place for around 50 years,” says Venables.
However, those same characteristics that make vet clinics attractive tenants can also present challenges. The specialised nature of veterinary fitouts means properties can be more difficult to relet or repurpose if and when a tenant does eventually relocate.
For that reason, location fundamentals become especially important. These include the ease of parking (Marcos notes that pet owners rarely travel to the vet via public transport), accessibility (ground-floor premises are typically preferred) and local demand drivers. Catchment analysis, including demographics and pet ownership rates, is essential for understanding an asset’s viability.
“It needs to be in a high-traffic area with strong population density, typically where young families are located,” adds Dixon.
Zoning restrictions and council approvals can further complicate site selection. Marcos explains that planning requirements and local council rules vary significantly across jurisdictions.
“Vet permissibility varies from council to council,” he says. “In some areas, you can set them up in residential zones, while in others, it needs to be commercial or mixed-use.”
Looking ahead, rising pet ownership rates and consumer spending on petcare will only strengthen investment activity, with Dixon anticipating continued consolidation and expansion across the veterinary sector.
“Most of the sector is owned by private equity, so we’ll continue to see consolidation through acquisitions combined with greenfield expansion,” he says.
Marcos even sees vet clinics moving into a category all of their own.
“We’re seeing veterinary property emerging as an asset class standing on its own two feet,” he says. “I can absolutely see a world where there are veterinary property funds and investment opportunities focused specifically on the sector.”
