Viticulture property market could be approaching record highs
Sales activity in the viticulture property market is set to rise during the coming season and could reach the record peaks last seen in the sector around six years ago, says a regional real estate leader.
Nelson/Marlborough Sales Manager for PGG Wrightson Real Estate, Joe Blakiston, says the market appears ready to take off.
“Although sales of viticulture land have been scarce over the past few months, as is invariably the case throughout the winter, interest continues to firm, with buyers enquiring after both smaller bare land blocks and properties of greater scale, suitable for corporate activity.
“Larger Marlborough wine companies are seeking land for development over the next few years, while investors from beyond the region are also paying close attention. While this has yet to translate into many significant sales, two 10 hectare production blocks that changed hands recently between $180,000 and $200,000 per hectare give a reliable indication as to where the market is heading and this sits as the current benchmark value for vineyards as the spring selling season approaches,” he said.
According to Joe Blakiston, confidence in the sector is rising as it becomes a strong sellers’ market.
“Sauvignon Blanc is the variety of choice and virtually all new plantings are in this flagship Marlborough grape. Optimism is similar to when prices for viticulture properties reached their previous peaks last decade. It is likely that the market will attain this level in the coming months.
“Talk is one thing, of course, although how much actual enthusiasm there is in the market should be seen shortly. While we are in a growth phase and as land supply in traditional areas is utilised, more interest is focused on larger blocks in outlying areas. Although these are less proven, they offer better economies of scale,” he said.
Blenheim-based viticulture property specialist for PGG Wrightson Real Estate, Ken McLeod, is currently marketing a property that illustrates this, a 300 hectare sheep property on the north bank of the Wairau River.
“This has created strong interest and its progress towards a sale will be keenly monitored. While this farm is within 30 kilometres of Renwick with reliable rainfall in a ‘summer safe’ area, its productive irrigated flats amount to 150 hectares with k-line irrigation and a large water right for around half that area. It would therefore suit planting in vines, representing a rare opportunity for viticulture development at such a large scale. How well it sells will help set expectations for the 2015/16 season.
“Aside from this, a number of additional new listings are also coming to the market as several growers recgnise the buoyancy that currently prevails and look to capitalise as property prices continue to firm,” he said.
03 579 3702/027 434 4069
03 579 3720/027 433 4746