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Vineyards begin to sell on rising confidence

CATHIE BELL
Last updated 07:24 07/03/2014

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Vineyards that have been on the market for years are starting to sell as buyers gain confidence in the wine industry again, Marlborough real estate agents say.

Bayleys Marlborough agent Tim Crawford said the company had sold 12 vineyards in the past year.

Wine companies buying land to secure supply accounted for most of the purchases, and that had increased the confidence of individual buyers, who had begun buying vineyards with houses.

"Before, most of the sales were without houses on them and with grape supply contracts. They were bought predominantly by wine companies or investment companies who were then leasing back to wine companies. "Some of these people have been watching the market and lurking for several years, they've decided now's the time to move."

Mr Crawford said because there had been a few sales, people were more confident about land values.

"When there are no sales, people are not sure where the price is."

Buyers were not so much worried about buying vineyards with supply contracts, Mr Crawford said. There were plenty of wine companies looking to secure more fruit so it had not been difficult to get a contract.

Harcourts agent Tom Rutherford said there were definitely more vineyard sales as people moved to secure supply.

All the sales he was involved with had been to people already in the wine industry, both from Marlborough and from other districts. The preference was for blocks without supply contracts, but the overall driver was for commercially viable blocks - they had to pay their way and not be over-capitalised.

Prices varied from $100,000 a hectare to $120,000 a hectare for Awatere vineyards and $165,00 a hectare to $190,000 a hectare for Wairau blocks.

Mr Rutherford agreed that the movement by large wine companies to buy land was boosting confidence in the market. "If the big boys are willing to spend some serious money, which they are at the moment, others are willing."

However, people were buying smarter this time, he said. They were going in with their eyes wide open and the blocks had to be commercially viable.

Meanwhile, the Overseas Investment Office confirmed that American wine company Constellation had bought more than 57 hectares of land in Blind River to expand its vineyards and winery business.

Constellation's purchase of 57.5875ha of land on Merrifields Rd from Ecoagman Ltd, a company owned by Zambians Penelope and Simon Brown was approved on January 30, the government regulator responsible for overseeing sales of land to foreigners said. The price was confidential.

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The office said the transaction was approved because it would benefit New Zealand from jobs, increased export earnings, increased primary products processing and additional investment for development.

- The Marlborough Express

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