Vineyards Direct deals in the acquisition and sale of vineyards to institutional investors.

For the common investor a vineyard investment can sometimes bring romantic notions before common sense and is both time consuming and capital intensive.

(Investments start at between €500,000 - €2 million)

The right amount of acreage to run a vineyard can vary from country to country and can be profitable with as little as 10 acres in France or Italy for premium grape growing soils. Sites of this size can yield long term investment returns of 20% per annum dependant of grape growing contracts and availability of co-ops for sale.

Profitability is not always going to become a reality with vineyard investments. And even with a good system in place for sale and a quality vineyard, owners can aim at an annual profit within the region of between 4 to 5 percent.
(Source: Global Vineyard Investments an Overview Vineyard Properties in USA).

1) A study by MKF Research in 2005 based on Californian vineyards concluded that the high-end producers of wine in the region need to plant an additional 18,000 acres by 2010 to keep up with the demand.

2) An estimated $13.7 billion aggregate value of California vineyards and $14.1 billion of wineries represents a potentially significant untapped investment opportunity.

3) In the Napa area the average cost per acre of planted vineyard is approximately €120,000 per acre, with unplanted sites at prices of approximately €60,000 per acre.

4) Development costs including operating costs will add approximately €20,000 - €40,000 per acre.

5) In some areas of Chile and Argentina land can however be secured at between €3,000-€4,500 per acre.

6) The average Napa vineyard value has appreciated at an approximate annual growth rate of 12% since 1967 outperforming most global stock and bond indices.

Vineyard Properties in France

• Many vineyards across France have fallen in value, and for a vineyard property in Bordeaux that would of cost around €11,000 - €12,000 per acre in the 90’s can now be bought at for between €6,000 - €7,500 per acre. This drop in value can offer knowledgeable investors a potentially exceptional return on investment.

• In Bordeaux areas such as St Emilion and St Estephe have been hit even harder, for instance a St Emilion Grand Cru Classé vineyard property can now be sourced for approximately €130,000 per acre wich in comparison to a few years previously would cost approximately 40% more.

• First growths have of course held there value and can run as high as several hundred thousand per acre dependant on the property.

• Institutional investors like Credit Agricole are currently looking at these potential investments.

• Burgundy vineyards averaged approximately 5% growth over the past 30 years.

• High quality properties in Bordeaux, depending on area site and classification, have increased at an average of approximately 10 -15% over the past 25 years, however a large proportion of lower quality sites have lost money.