Mendoza seems to have been the place to buy a "lifestyle" vineyard in 2013, with demand pushing prices up by 25 percent, according to the latest Global Vineyard Index from property consultants Knight Frank.
According to the report, the average price of the world’s vineyards increased by 6.8 percent in the year to June 2013, providing a good return on investment. Tuscany was the strongest-performing region in Europe, with average values rising 20 percent.
While malbec sales remain strong in the U.S., up 13 percent in the year to May 2013 (Nielsen), Argentine bureaucracy makes life complicated for the country's wine producers. However, vineyard land remains comparatively cheap: you can pick up anywhere from 4.5 hectares to as much as 20 hectares in Mendoza for the price of 1 hectare in the Napa Valley.
“Investors in Napa Valley, where a vineyard can cost $135,000-$600,000 per hectare, can acquire vines of a similar quality in Argentina for $30,000 per hectare, providing many with a tempting opportunity,” said Kate Everett-Allen of Knight Frank’s international residential research.
Meanwhile, in Tuscany, vineyard prices vary according to the area. Knight Frank notes that vineyards in Chianti Classico can range from 100,000 to 150,000 euros ($134,870–$202,300) per hectare, compared with 300,000 to 500,000 euros ($404,610–$674,350) in Brunello di Montalcino.
So, who is buying these vineyards? While institutional investors play a large role, Everett-Allen believes the nationality of vineyard buyers will shift from northern European and Chinese to other Asian buyers and Russians in the near future.
“Anecdotal evidence suggests Chinese and Hong Kong buyers are also looking beyond Bordeaux to other parts of France, such as Burgundy and Australia’s premium wine regions,” she added.
While you might think that Chinese buyers are taking over Bordeaux, from the column inches that such purchases attract, their ownership remains a drop in the Bordeaux wine lake.
Alexander Hall of Vineyard Intelligence explained that Chinese buyers represented just 15 percent of the total vineyard area that changed hands in 2012. While this is a large increase since the first purchase of a Bordeaux estate by a Chinese investor in 2008, “the French still dominate the Bordeaux market,” he said.
“There’s anecdotal evidence to suggest some vineyard recently acquired by Chinese buyers are back on the market,” added Hall.
*A lifestyle vineyard is defined as five hectares or more by Knight Frank.
View the full report here