Pet hotels draw commercial buyers with ultra-long leases

The activity comes as Australians are spending more than ever on their pets. About 73 per cent of Australian households now own at least one pet, up from 61 per cent in 2019, according to Animal Medicines Australia, and the national pet population has reached 31.6 million. Australians spent an estimated $21.3 billion on their animals in the year to March 2025.

In Port Melbourne, a 1500-square-metre industrial property occupied by a pet hotel is currently being marketed for sale, with offers closing on October 16.

The Fishermans Bend property sits on 1738 square metres of land and is leased to Pet Resorts Australia, which operates 14 locations across Victoria, NSW and Queensland.

The tenant signed a 10-year lease in August 2023, with three further 10-year options that could extend its occupation to 2063. The property currently returns about $356,000 a year, with fixed annual rental increases of 3.5 per cent.

Long leases for four-legged tenants

In Canberra, a purpose-built Hanrob Pet Hotels facility at Symonston is due to go under the hammer on October 27.

The one-hectare property includes a new 15-year lease to 2041 and three further 10-year options that could extend the lease to 2071.

The facility generates net income of about $300,000 a year, with Hanrob responsible for property outgoings and structural repairs under a triple-net lease arrangement.

The purpose-built boarding facility has operated since 2015 on the site about 6.5 kilometres from Canberra Airport.

Further north, a Kip Happy Stays pet resort at Purga, near Ipswich in Queensland, sold in August with an even longer potential occupation period.

The 11.59-hectare property was offered with a new 20-year lease to 2046 and six further 10-year options, potentially extending Kip’s tenure to 2106. The operator has 37 locations across Australia, according to the sale campaign.

Such leases can make specialist properties attractive to investors because an operator that has invested heavily in fitting out a facility may be less inclined to relocate than a conventional warehouse or office tenant.

Pet resorts also require properties that can accommodate uses well beyond simply storing goods or housing desks, from exercise and boarding areas to ventilation, climate control, parking and customer drop-off facilities.

Warehouses find a new use

At the smaller end of the market, dog daycare operators are also looking to industrial property for space.

A planning application lodged in Melbourne’s Oakleigh South this month proposes converting an existing warehouse into an indoor dog daycare for up to 20 dogs, plus puppy-school classes.

The proposal requires only a lightweight internal fit-out, with no external building works planned.

Another proposal in Northcote seeks to convert an existing warehouse into a dog daycare and grooming facility.

Those businesses add an unusual source of demand for industrial space, particularly in established suburbs where operators can be close to large residential populations.

However, locations can present a balancing act. Pet-care businesses need convenient access to customers while uses involving large numbers of animals can face planning, noise and amenity considerations that make conventional retail or mixed-use sites difficult.

Traditional boarding facilities, meanwhile, can require substantially larger sites, making outer-suburban and semi-rural locations attractive.

The result is a property sector that ranges from converted inner-city warehouses to sprawling purpose-built resorts, but with a common driver: a growing population of Australians willing to spend on their animals.

Animal Medicines Australia estimates about $400 million was spent specifically on pet boarding and minding in the year to March 2025.