Commercial property investors have started looking at pet hotels the way they look at service stations and childcare centres. The attraction is the lease.
That's the finding of a report by Thomas Hounslow on commercialrealestate.com.au, published 16 October 2026. It looks at three pet accommodation properties that have sold or gone to market in Victoria, the ACT and Queensland, each with a lease that runs for decades.
If you run boarding or daycare from a site you rent, the people reading those listings are the kind of people who could end up owning your building. It's worth knowing what they see.
The three properties
| Site | Operator | Land | Lease | Income |
|---|---|---|---|---|
| 7 Phillip Court, Port Melbourne VIC | Pet Resorts Australia | 1,738 m² (1,500 m² building) | 10 years from August 2023, three 10-year options to 2063 | About $356,000 a year, 3.5% fixed annual increases |
| 88 Mugga Lane, Symonston ACT | Hanrob Pet Hotels | About 1 hectare | New 15-year lease to 2041, three 10-year options to 2071 | About $300,000 a year net, triple-net lease |
| Purga, near Ipswich QLD | Kip Happy Stays | 11.59 hectares | New 20-year lease to 2046, six 10-year options to 2106 | Sold in August |
Offers on the Port Melbourne property close on 16 October. The Symonston facility, purpose-built and trading since 2015 about 6.5 km from Canberra Airport, goes to auction on 27 October.
The operators behind them are big. The report says Pet Resorts Australia runs 14 locations across Victoria, NSW and Queensland, and the Kip sale campaign put that operator at 37 locations nationally.
Why investors like a kennel tenant
The report's reasoning is simple. An operator that has spent heavily fitting out a facility is less likely to walk away than an ordinary warehouse or office tenant. Exercise yards, runs, ventilation, climate control, parking and a drop-off area don't pack into a truck.
There's a second reason the report touches on, and anyone who has tried to open a kennel knows it well. Uses with lots of animals run into planning, noise and amenity limits. Getting a new boarding site approved is hard in most of Australia, so an existing approved site is scarce. We wrote about that from the buyer's side in buying a pet boarding business: the consent is the asset.
Put those together and you get what an investor wants. A tenant who can't easily leave, on a site that can't easily be copied, paying a rent that goes up every year.
What those lease terms mean for the operator
The headline numbers are written for investors. Read them from the tenant's side and a few things stand out.
A 3.5% fixed increase doubles the rent in about 20 years. Fixed means it goes up whether your year was good or bad. Take the Port Melbourne figure as an example: if $356,000 is this year's rent, seven more increases take it to about $453,000 by the time the first term ends in 2033. A 40-year run of options at that rate ends at roughly four times the starting rent.
Triple net puts the building's costs on you. Under the Symonston lease, the report says, Hanrob is responsible for property outgoings and structural repairs. That typically means rates, insurance and maintenance on top of rent, and here the structure as well. A roof, a slab or a drainage failure becomes the operator's bill. Check exactly what your own lease passes through, because the wording differs from lease to lease.
Options are yours to take, not the landlord's. A long chain of options gives you security of tenure, which matters when moving means a new approval. It doesn't oblige you to stay. The value of an option is that you get to decide at each renewal, so diarise the exercise dates.
A sale of the building doesn't end your lease. All three of these properties come with the tenant in place. That's the point of them. A new owner steps into the landlord's shoes. Ask your lawyer whether your lease is registered and what that means in your state.
None of this is legal or financial advice. It's the set of questions we'd want answered before signing 15 or 20 years of anything.
The smaller end: warehouses becoming daycares
The report also points to daycare operators moving into industrial buildings. A planning application in Oakleigh South, in Melbourne's south-east, proposes converting a warehouse into an indoor daycare for up to 20 dogs plus puppy-school classes, with only a lightweight internal fit-out. Another in Northcote seeks to turn a warehouse into a daycare and grooming facility.
Industrial sites suit daycare for the same reason they suit a lot of noisy businesses. They sit near big residential populations without sharing a wall with them. Overnight boarding usually needs much more land, which is why the bigger facilities end up on outer-suburban and semi-rural blocks like Purga.
Before you sign for a warehouse, find out what the zone allows and what the council will want to see. Our guides to planning approval for a pet business and the Victorian planning permit are a starting point.
The market behind it
The report draws its demand figures from Animal Medicines Australia. About 73% of Australian households now have at least one pet, up from 61% in 2019, and there are around 31.6 million pets nationally. Australians spent an estimated $21.3 billion on their animals in the year to March 2025, and about $400 million of that went on boarding and minding.
That last figure is the one boarding operators should keep in mind. It's real money, but it's a fraction of the total, spread across a lot of businesses. The national groups paying these rents have scale on their side. An independent kennel signing a lease on similar terms needs to know its own numbers well.
Run the rent against your quietest year
Boarding revenue is lumpy. School holidays and Christmas carry the year, and the weeks in between pay the rent or don't. A fixed increase lands in the quiet months too.
So before you agree to a long lease, or renew one, work out:
- Your rent and outgoings as a share of revenue, month by month rather than as an annual average.
- How full you are by night across the year, so you know how much room there is to absorb an increase.
- What next year's bookings already look like, before the increase arrives.
We've laid out how kennel income actually breaks down in what pet boarding and kennel owners earn.
Petboost is our software, so weigh this accordingly. Its reporting and intelligence includes a revenue forecast, weighted by day of the week with a confidence band, and capacity utilisation reporting. That's the screen at the top of this post. It's built from the bookings you already take, so the numbers are there when the landlord's agent rings. See how it fits a kennel on Petboost for pet boarding, or a daycare on Petboost for dog daycare.
A spreadsheet works too. What matters is that the rent decision is made against your quietest month, not your busiest.
Frequently Asked Questions
Why are investors buying pet hotels?
For the lease. The properties reported in October 2026 came with leases and options running decades, to 2063, 2071 and 2106. Operators that have spent heavily on a fit-out and hold a hard-to-get planning approval are unlikely to relocate, which makes them a secure tenant.
What is a triple-net lease?
A lease where the tenant pays the property's outgoings, such as rates, insurance and maintenance, on top of rent. The Hanrob lease at Symonston also makes the tenant responsible for structural repairs. Exactly what passes through depends on the lease wording.
How fast does a 3.5% fixed rent increase add up?
Rent increasing 3.5% a year roughly doubles in 20 years. On $356,000 a year, seven increases add close to $100,000.
Can a dog daycare operate from a warehouse?
Often, subject to planning approval. Proposals in Oakleigh South and Northcote in Melbourne seek to convert existing warehouses into dog daycares. Check what the zone permits and what your council requires before signing a lease.
How much do Australians spend on pet boarding?
Animal Medicines Australia estimates about $400 million was spent on pet boarding and minding in the year to March 2025, out of $21.3 billion spent on pets overall.
Sources
- Thomas Hounslow, "Pet hotels draw commercial buyers with ultra-long leases", commercialrealestate.com.au, 16 October 2026: commercialrealestate.com.au
- Animal Medicines Australia, Pets in Australia: A National Survey of Pets and People (2025), as cited in the report above: animalmedicinesaustralia.org.au
Property details, lease terms and income figures are as reported by commercialrealestate.com.au from the sale campaigns. The rent projections are our own arithmetic on those figures.