Investing in a vineyard

Vineyards remain popular with rich foreign investors. But also, fortunately, French people who are looking for profitability as well as a place to live inspired by a desire to return to the land.

After Bernard Arnault at Clos des Lambrays and François Pinault at Clos de Tart, Olivier and Martin Bouygues signed a new major wine investment in 2018: Domaine Henri Rebourseau.

However, this type of acquisition remains rare and above all very confidential. It is necessary to be patient and financially sound. These purchases require an upstream study of the project, as many criteria must be taken into account, both from a technical and commercial point of view. A property with a lot of stock, for example, should be avoided.

Another imperative is to provide working capital. A wine estate is agriculture. There can be good or bad years depending on the weather. You also have to pay staff, unless you want to get your hands in the grapes. Another emerging trend. 

Good value investments in the Bergerac region, for example..

Wealthy foreign investors are of course still present on this market. If the Chinese, who have been in the news for the grands crus, are less present, the European clientele remains active and is most often interested in finished and already renovated products. At the same time, the love of the French for their vines remains intact. The first category is that of passionate purchases, but there are also investments in vineyard structures where the land does not depreciate. For, if there is a real revival of interest in land in this case, vineyard land is also becoming a safe haven.We note the emergence of another typology of French buyers, such as engineers, company directors or CSP++ who are approaching or exceeding forty years of age, and have substantial savings, wishing to change their life and get their hands on the land. Hence the appearance of new uses and desires in these wine estates.Indeed, today’s new winegrowers are less focused on production and more on marketing and promotion. With a very clear increase in the development of tourism linked to the passion of the vine. These properties are no longer just places to live and do business. A third vocation is emerging based on hospitality and “wine tourism”. “But not without constraints. It requires outbuildings and annexes, because local urban planning schemes are increasingly drastic and constructability is not guaranteed.The new winegrowers are less focused on production and more on sales, marketing and promotion.

Organic and wine tourism

For the winegrowers who are changing over because they want a gentle life with their families, in the countryside, far from the hustle and bustle of Paris, there is wine tourism. It is increasing a lot in the Bordeaux region and is a real asset. This is the additional income necessary to amortize and make these properties profitable. For example, restaurants are beginning to open on the estates. However, be careful because with wine estates, the nerve of the war remains the sale of the wine! If you buy this type of property without the desire to travel, to go and see customers, to visit trade fairs, and without taking care of the sale, you will go straight into the wall. You have to be creative in your marketing.Moreover, if the choice of a nice terroir is a prerequisite, there is a growing demand for organic farming. We have more and more clients who want a property with this potential, but not all territories are entitled to become so. The Bergerac vineyards have started their transition to organic since 2012 and are moving towards this wine tourism.In general, ecology is a new parameter in the search for a natural environment without any nuisance. As a result of this green consciousness, demand is also directed towards properties with land (wood, forest, moorland) capable of offering an ecological reserve. The issue of climate and water resources is also becoming a concern. The certainty of having sufficient water resources both for the vineyard and for wine-making is now a requirement. In view of all these emerging phenomena, the quality of the appellation at the time of the acquisition of a wine estate remains essential. As is the case with the farming contract attached to the property, if applicable. It can often be complicated to terminate.Similarly, if the residential building is used privately or for tourism, a winegrowing investment is made up of three parts: the vines, the farm buildings and the winery. It is important that at least two of these three items are in good working order and ready for use.

In search of profitability

In addition, beware of over-investing in pharaonic bastides and sumptuous cellars. These can lead to problems when resold. They inhibit any possibility of profitability in the short or long term, as houses and land are not depreciable items. An investment in a wine-making and maturing cellar costing several million euros will generate recurrent losses. If there have been huge budget overruns, they may cause the assets to depreciate at the time of resale.To make an exceptional property grow, it has to be exceptional from the very beginning, which is why you need to be accompanied by a real estate partner who knows the area and its advantages, such as Anthouard Immobilier. You should also think about possible restorations which can be very expensive, as the regional directorate of cultural affairs or the architect of Bâtiments de France confides, “…a building with a beautiful architecture requires and deserves quality renovations. The management of the exterior spaces and the parks are also one of the priorities, as the staging of the property must be a permanent concern in the renovation and rehabilitation. A rare heritage is all at once: a bastide, an architecture and an environment with its landscape. “Without forgetting that these properties do not derogate from the golden rule of real estate: the quality of the location. Here again, Anthouard Immobilier can guide you towards the best craftsmen to make your dream a reality that comes to life and bears fruit.

Investing in a vineyard

Vineyards remain popular with rich foreign investors. But also, fortunately, French people who are looking for profitability as well as a place to live inspired by a desire to return to the land.After Bernard Arnault at Clos des Lambrays and François Pinault at Clos de Tart, Olivier and Martin Bouygues signed a new major wine investment in 2018: Domaine Henri Rebourseau.However, this type of acquisition remains rare and above all very confidential. It is necessary to be patient and financially sound. These purchases require an upstream study of the project, as many criteria must be taken into account, both from a technical and commercial point of view. A property with a lot of stock, for example, should be avoided.Another imperative is to provide working capital. A wine estate is agriculture. There can be good or bad years depending on the weather. You also have to pay staff, unless you want to get your hands in the grapes. Another emerging trend.

GOOD VALUE INVESTMENTS in the Bergerac region, for example…

Wealthy foreign investors are of course still present on this market. If the Chinese, who have been in the news for the grands crus, are less present, the European clientele remains active and is most often interested in finished and already renovated products. At the same time, the love of the French for their vines remains intact. The first category is that of passionate purchases, but there are also investments in vineyard structures where the land does not depreciate. For, if there is a real revival of interest in land in this case, vineyard land is also becoming a safe haven.We note the emergence of another typology of French buyers, such as engineers, company directors or CSP++ who are approaching or exceeding forty years of age, and have substantial savings, wishing to change their life and get their hands on the land. Hence the appearance of new uses and desires in these wine estates.Indeed, today’s new winegrowers are less focused on production and more on marketing and promotion. With a very clear increase in the development of tourism linked to the passion of the vine. These properties are no longer just places to live and do business. A third vocation is emerging based on hospitality and “wine tourism”. “But not without constraints. It requires outbuildings and annexes, because local urban planning schemes are increasingly drastic and constructability is not guaranteed.The new winegrowers are less focused on production and more on sales, marketing and promotion.

Organic and wine tourism

For the winegrowers who are changing over because they want a gentle life with their families, in the countryside, far from the hustle and bustle of Paris, there is wine tourism. It is increasing a lot in the Bordeaux region and is a real asset. This is the additional income necessary to amortize and make these properties profitable. For example, restaurants are beginning to open on the estates. However, be careful because with wine estates, the nerve of the war remains the sale of the wine! If you buy this type of property without the desire to travel, to go and see customers, to visit trade fairs, and without taking care of the sale, you will go straight into the wall. You have to be creative in your marketing.Moreover, if the choice of a nice terroir is a prerequisite, there is a growing demand for organic farming. We have more and more clients who want a property with this potential, but not all territories are entitled to become so. The Bergerac vineyards have started their transition to organic since 2012 and are moving towards this wine tourism.In general, ecology is a new parameter in the search for a natural environment without any nuisance. As a result of this green consciousness, demand is also directed towards properties with land (wood, forest, moorland) capable of offering an ecological reserve. The issue of climate and water resources is also becoming a concern. The certainty of having sufficient water resources both for the vineyard and for wine-making is now a requirement. In view of all these emerging phenomena, the quality of the appellation at the time of the acquisition of a wine estate remains essential. As is the case with the farming contract attached to the property, if applicable. It can often be complicated to terminate.Similarly, if the residential building is used privately or for tourism, a winegrowing investment is made up of three parts: the vines, the farm buildings and the winery. It is important that at least two of these three items are in good working order and ready for use.

In search of profitability 

In addition, beware of over-investing in pharaonic bastides and sumptuous cellars. These can lead to problems when resold. They inhibit any possibility of profitability in the short or long term, as houses and land are not depreciable items. An investment in a wine-making and maturing cellar costing several million euros will generate recurrent losses. If there have been huge budget overruns, they may cause the assets to depreciate at the time of resale.To make an exceptional property grow, it has to be exceptional from the very beginning, which is why you need to be accompanied by a real estate partner who knows the area and its advantages, such as Anthouard Immobilier. You should also think about possible restorations which can be very expensive, as the regional directorate of cultural affairs or the architect of Bâtiments de France confides, “…a building with a beautiful architecture requires and deserves quality renovations. The management of the exterior spaces and the parks are also one of the priorities, as the staging of the property must be a permanent concern in the renovation and rehabilitation. A rare heritage is all at once: a bastide, an architecture and an environment with its landscape. “Without forgetting that these properties do not derogate from the golden rule of real estate: the quality of the location. Here again, Anthouard Immobilier can guide you towards the best craftsmen to make your dream a reality that comes to life and bears fruit.