Sauvignon country comes up trumps for investment
Marlborough remains firmly in the spotlight when it comes to investment sales in the wine industry.
Colliers International specialist Mike Laven said it was imperative to have good marketing arrangements.
"The big sauvignon players in Marlborough with access to the US are unstoppable.
"Many companies in other regions are sitting on good assets but but with relatively few open market sales it's difficult to gauge values.
"In Marlborough the top values are nudging $300,000 per hectare which is back up to 2007 levels."
More commonly, in Rapaura, Wairau and the southern valleys, the values range from $100,000/ha to $250,000/ha depending on location.
Levan was recently involved in establishing values for the the Hawkes Bay Pask Winery.
The 50 per cent owner of Pask, John Benton, purchased the half he did not own and merged the business with Jackson Estate which he bought in 2013, restructuring it and building a new winery.
Laven also brokered the recent investment by Kiwisaver fund Booster, which acquired Waimea Estates in Nelson. In April, Booster also bought a minority stake in Marlborough producer Awatere River Wine Company.
A more creative deal was the recent sale of the 12.9 hectare Kahurangi Estate home block in Nelson's Moutere Valley.
The vineyard and winery property was offered as an investment returning 7.5 per cent of the price paid, in a 10-year leaseback to operator Greg Day. The business remains for sale.
"Outside Marlborough, wine company and vineyard owners face a more daunting task if they are looking to sell, and it can take a while – sometimes years – to find the right buyer.
"Unless it's a lifestyle vineyard and business priced at around $1 million or less, the pool of buyers for larger assets in these regions is very small.
"When the time comes to sell, the price depends on earnings," Laven said.
Bayleys viticulture agent in Marlborough Kurt Lindsay said there was demand in the region because of the limited vineyard properties for on the market.
Recent Marlborough sales by Bayleys of predominantly Sauvignon Blanc-producing properties included the 8ha Tuamarina Rd vineyard for $2.8m, the 7.8ha winery at 2 Flemings Rd for $1.5m, 8ha winery at 100 Watsons Rd for $2.4m, and a 51ha block at 75 Pembers Rd for $11.3m.
The latest Ministry of Primary Industries update to June 2017 revealed profit before tax was down on average in Marlborough wineries by 22 per cent to $11,600 per hectare but well ahead of the $6100/ha of two years ago. The average yield at 14 tonnes/ha was down 7 per cent, but still the third highest on record.
The average price per tonne of Sauvignon Blanc was down 3 per cent at $1755/tonne.
Bayleys specialist in Hawkes Bay, Glyn Rees-Jones, said the recent sale of The Crossroads Winery was challenging because it was too big for boutique producers but too small for major wine companies.
Auckland-based Zeffer Cider bought it from Yealands Family Wines to use the plant and land for expanding cider production while still maintaining some of the vineyard to fulfil supply contracts.
Rees-Jones said grape growing blocks in Hawkes Bay had been replaced with other crops depending on soil type.
"We've sold vineyards for conversion to apples. It's the heavier soils that are more suitable rather than the Gimblett Gravels."
"It can take time to achieve a sale. It's been very difficult with the wet weather, and a lot of wineries are still getting their act together.
"It all depends on whether you have irrigation. But there are still new developments coming on such as the new wineries developed for Delegats and Villa Maria near Hastings," Rees-Jones said.