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What is a Vineyard Really Worth?

20 June 2017

The FNSafer (French National Federation for Land Development & Rural Settlement)  recently published its 2016 annual report on the vineyard land market. However, the figures in this study do not necessarily represent the actual prices on the market.

Two members of the WI&NE association, well-versed in the marketplace, offer their analysis.

Here is the viewpoint of David Lawton, our Vineyard Transaction Expert on wine land rates.

“Vine is a natural, agricultural product. It does not result from a fixed manufacturing recipe nor its price. Many parameters come into play, and correctly valuing vineyards is far from simple.

Among other things, it depends on the following:

Of course, there are a host of considerations to examine before a proper vineyard investment evaluation can be made. Statistically speaking, even though the prices have settled down, it would be necessary to conduct an in-depth study. Therefore, before buying a vineyard, it is advisable to consult seasoned vineyard experts who will analyze the options and accompany the buyer throughout the process and beyond.

However, I agree entirely with FNSafer’s property market analysis. It nicely summarizes the current market trends by explaining that the vine is today globally undervalued, as we can buy a Bordeaux vineyard in mint condition between 12,000 to 25,000 € per hectare. Let’s not forget, a vineyard is, after all, a production tool.”

Here is the perspective on wine land rates by  Pascal Chatonnet, Enology Consultant at Labexcell, a facility technical expertise firm.

“The price drop reported by the Safer observatory is not representative of transactions in general!

I do not see a significant price drop except in the Champagne and Chablis wine regions, representing exceptional cases where prices have soared occasionally.

Conversely, the lesser-rated regions today offer very accessible prices concerning their operational profitability potential. However, this is not the case for the so-called top-of-the-range vineyards, where only resale and tax exemption for French tax residents can offer the prospect of profit in the medium to long term, provided that regular investment in working capital is added to the initial investment.”

Article translated FR>EN by:

Nathalie Parent Dumoulin, Translator, NEXT EDITION, WI&NE Nouvelle-Aquitaine

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