Vineyard & Land Market
The reputation of a Domaine and the Winemaker significantly impacts the market price increase of the land
Evolution of the Land Price, 2010 to 2017 in numbers
Over the last decade, The price of land for fine wines has increased significantly.
According to SAFER (Land registry organisation in France), OMC in Italy and the Silicon Valley Bank in the US, in super prime regions including Burgundy Grands Crus or Pauillac, the value of the land has increased significantly in the last 10 years. This growth has been developed in smaller and up-coming appellations around the world.
This significant optic has been driven by a a global increase of fine wine consumption in the US and Asia, combined with a global trend towards high quality wines.
Growing number of winemakers farming sustainably.
There is a growing number of high quality up-and-coming producers who are seeking to lease and acquire vineyards and farm sustainably and general sought after brands. Such growers are also motivated to buy the land after a first period of lease, as it is a key asset for them to continue to support their development and their brand. We therefore see an opportunity to work closely with these top winemakers to select judiciously chosen plots, with best opportunities to provide strong return on investment.
Why invest with VTF
VTF Portfolio Managers have a combined 50 years of experience in the wine & financial industries. We work closely with top and up and coming winemakers, and those exclusive partnerships give access to the most promising plots & vineyards. Additionally, VTF gains short term returns by leasing the land to those winemakers and thereby making the asset work from day one. At the end of the lease, typically 5 years, VTF can sell this sustainably farmed land to those lease holders or other potential buyers.
We work closely with top winemakers & rising stars of the wine business.
Top winemakers have unparalleled knowledge of which plots are available for purchase and would be of quality to make great wine. The market is ultimately closed for new investors wanting to participate in the vineyards and land performance. Transactions happen at massive premiums. Benefits of investing aside a winemaker include the right to pick the parcels as well as priority to select land. For the VTF fund it means that we can select quality assets with the support of winemakers, where we can lease the asset to the winemakers themselves for 5 years. This is value for the fund beyond the appreciation of the land.
Our partnerships to the winemakers give us priority access to the best land and vineyards.
Once the land has been farmed for 5 or more years by a selected winemaker, the fund has the option to sell the land to the winemakers which may have been able to raise sufficient funding by then. Alternatively the land can be sold to another investor, who will have the guarantee that the vineyard and the soil have been developed and preserved to the highest standards with environmental values.
In addition to land appreciation, the asset will generate income from the lease.
It typically takes 3 years for a château to transform a new plot. Which then would have been fertilised with chemicals, into a high standard plot, that meets the needs and expectations of a grand cru. By partnering with selected winemakers, VTF is eliminating this time barrier, as the soil would have already been farmed and kept at the highest standard as required by the industry.
Valuation of Vineyards & Land.
Valuation of vineyards is done by region as well as by sub region on annual basis.
The valuation levels accord to the local terroir official public records made by land registers of the respective countries. In France we use SAFER, which is the official summary of all transactions in France, and thereby is the benchmark for taxation in the country between land owners. The equivalent terroir official public records in Italy are performed by the OMC, and by the Silicon Valley Bank in the US.
Vineyards & Land Investment Activity.
Since several years, there is a global trend for UHNWs and a number of Silicon Valley Tech Entrepreneurs, as well as luxury conglemrates such as LVMH and Kering Group, to buy land & estates and thereby impact significant price increases in the corresponding regions.