Much has been made of the declining desirability of owning a vineyard, with a spate of high-profile sell-ups last year suggesting that owners are cashing in their investments and getting out.
However, the latest annual Wealth Report by independent real estate company Knight Frank paints a rather different picture and signals the regions worth focusing on for prospective buyers.
According to the report, regions ‘trading up’ in value include the classic triptych of Champagne, Bordeaux and Burgundy in France. These three regions best fit the magic formula for current vineyard value which is “vineyards with a strong narrative story focusing on provenance and craftsmanship”, says the report.
In the US, Napa Valley vineyard value continues to climb, but Oregon’s Willamette Valley is also one to watch. Hailing the latter as “a cool-climate sweet spot for Pinot Noir and Chardonnay”, the report says Willamette Valley delivers “Burgundy-adjacent appeal at lower absolute prices”.
Italian job
For those seeking to snap up hectarage in Italy, Piedmont comes out on top due to a “deep global demand for its scarce, ultra-premium brands.”
However Tuscany is also undergoing big viticultural improvements, especially in the areas of Montalcino and Bolgheri, meaning Tuscan vineyards are becoming an increasingly valuable asset.
“In Tuscany we are seeing a big change towards quality over quantity, organic over ordinary, and a movement towards better growing areas, while turning over less suitable land to other production, such as olives and fruit trees,” says Bill Thomson, chairman of Knight Frank’s Italian Network.
“This is mirrored in changes in the cellars of the better producers.”
How Technology Is Transforming No- and Low-Alcohol Wine
Tourism counts
If you’re tossing up between buying a vineyard in either South Africa’s Stellenbosch or Australia’s Barossa Valley (both of which costs about US$300,000 per ha – see list below), the stronger investment may be Stellenbosch. Why? Because, as the report highlights: “The most durable margins accrue where place, people and hospitality convert visitors into advocates”.
The regions excelling in all three include Napa Valley, which Knight Frank says “sets the benchmark for wine hospitality and lifestyle luxury”, but also Stellenbosch, Provence and Tuscany, which all have “deep experiential pedigree” combined with “stunning landscapes, premium hospitality and excellent wines.”
That’s not to say that the Barossa shouldn’t be considered, however, with vineyard value there (and in Australia’s Eden Valley) expected to trade up.
Two further regions flagged by the Wealth Report as having strong investment potential are Argentina’s Uco Valley, which it said offers “a dynamic tourism infrastructure”, and Georgia.
“On the frontier of Europe and Asia, Georgia delivers a unique wine story steeped in religion, culture and history”, propelling it into Knight Frank’s top ten locations for “experiential consumption”.
Scarcity beats scale
Ultimately, for the investor, scarcity beats scale.
“Vineyards in the top regions such as Champagne and Bordeaux are where the worlds of luxury brands and commercial winemaking overlap, creating a highly resilient asset class,” says the report.
However, changing consumer preferences in wine style is also “reshaping the opportunity map”, and creating new vineyard investment hotspots.
“Lighter, more tension-driven reds and vibrant, precise whites – combined with the effects of climate change – are reshaping the opportunity map. The southern Mâconnais and northern Beaujolais are attracting attention, while the Loire Valley shows similar momentum,” says Nicolas Parmentier, head of vineyard transactions, Janssens Immobilier Knight Frank.
What 1h of vineyard costs around the world (in US$)
When vineyard value is broken down by cost per hectare, it can throw up a few surprises. For example, it costs the same amount to buy a single hectare in Marlborough, New Zealand as it does in Essex, UK (US$120,000 per hectare).
And if volume’s your goal and you happen to be looking in Italy then it’s worth knowing you could pick up 5ha in Chianti Classico for roughly the same price as just 1ha in Bulghari or Brunello de Montelcino.
