The natural capital of the Ile de Beauté is practically unrivalled in France. A perfect example of the ‘love at first sight’ property market.
From the Val de Loire to Bordeaux, and the Vallée du Rhône to the Coteaux du Var, exceptional wine estates score highly in the ‘love at first sight’ property market.
Purchasing a vineyard is no ordinary transaction. It is about emotion and passion, rather like buying a beautiful piece of jewellery. In Emile Garcin’s Aix office, where he has just sold the Château de Sannes to Pierre Gattaz, the former boss of bosses, he explains: “This serious wine aficionado fell in love with the most beautiful château in Luberon, a sentiment fortunately shared by his wife.” But the butterflies don’t stop after the purchase, new owners have to contend with grape picking, mediocre harvests, hail storms, parasite attacks, etc. It goes without saying that if you want to become a winemaker you need real passion.
Successful leaders, retired business executives, foreigners enamoured with the French lifestyle, winemakers and wine trading companies looking to diversify are all lining up to purchase vineyards. The volume of transactions is the highest it has been for 25 years. Prices are astronomical e.g. the 250 plus million Euros offered by Artémis, the holding company of the Pinault family, for Clos-de-Tart, the crème de la crème of Côtes de Nuits in Burgundy. Never has a hectare with a prestigious wine designation been so expensive: six million Euros for prestigious Burgundies, 1.5 million in Pomerol i.e. respective increases of 9% and 15% last year. Saint-Julien and Margaux are priced at 1.2 million almost as much as Côte-Rôtie hailing from the Rhône Valley. “Overall, prices are on the rise but it’s a two-speed market,” explains Michel Veyrier from the Vinea Transaction network. “Fine wines are seeing an increase of around 5% per annum while generics have only risen by 1.5%.” The ‘Macron effect’ seems to be having a positive impact just as it did on the traditional property market: “The presidential election has injected confidence into the market as well as a promise of regulatory stability, which is necessary in the winemaking business as projects are very long-term,” observed, reassuringly, the founder of Vinea.
Make that a rosé!
Wine drinkers’ tastes are changing. They tend to drink less but better quality. Given this new trend, winemakers from Provence have worked very hard to improve the quality of their wines. Result? Sales have recovered in France and are up by 30% per year for exports. When it comes to young people, rosé often rivals champagne. In London pubs, French rosé is becoming even more popular than the white wine habitually enjoyed by the English. “Similarities with Champagne wines are increasing: the emergence of serious brands, sourcing in the form of grape purchases and bulk wines, distribution channels and identical drinking venues. These changes are also affecting the property market in Provence, which is going from strength to strength, and we’re only seeing the start of it,” predicts Stéphane Paillard (Bureau Viticole). Moreover, the contribution of new winemakers is not negligible. They may be novices when it comes to winemaking but are experts when it comes to designating roles and responsibilities, and they have applied these management practices to running vineyards. Thibaud Desprets (Propriétés et Domaines) doesn’t mince his words when he compares them to the ‘Roman generals’ who retired to villas in Provence when the region was a province of Rome. “After forging a career in another life, they are well able to mobilise the necessary personnel and technical know-how,” he explains.
In terms of buying and selling land, Côtes-de-Provence is the most sought-after although it often subject to fierce bidding wars. As a rule of thumb, a hectare goes for around 50,000 Euros in the back country but far higher in Bandol and as you get closer to the coast. The Côteaux-Varois-en-Provence and Coteaux d’Aix-en-Provence wine designations - interesting local wines - are a little more affordable. “In Provence the demand for wine estates far outstrips supply,” explains Isabelle Maligne (Vinea Transaction Provence Côte d’Azur). “Given the choice between buying a yacht or a winery, city dwellers jump at the chance to own an estate and ‘get back to the land’.” On the flip side, the current owners do not want to abandon the vines their fathers and grandfathers had so much trouble nurturing. The current offering consists of small properties starting at around 1.5 million. At the top end, the offering includes wine estate farmhouses, and châteaux with country houses and vineyards. “On average, a château can cost anything between 4 and 6 million. This is for an operation with at least twenty wine-producing hectares and an on-site team selling 100,000 bottles a year. Around the Gulf of Saint-Tropez, the prices of mansions are obviously far higher,” explains the agent.
Sylvie Terrier (Agence du Haut Var - Sylvie and Michel Terrier) has just sold a 35-hectare château near Draguignan and a small Côtes-de-Provence AOC vineyard to a senior company director albeit a junior winemaker. The price (confidential) is thought to be in the region of 4 to 7 million Euros. The gamble will be whether plans to extend the vineyard will receive the go-ahead. “This is a typical example of long-term asset diversification,” explains Sylvie Terrier. “In terms of resale, the estate could be worth 12 to 13 million Euros following heavy investment. In the winemaking world, returns are related to improvements carried out on the property, which have to correspond to market basics: old high-quality buildings, quiet locations and healthy contiguous vineyards.”
Gigondas joins the greats
In northern Côtes-du-Rhône, the most prestigious land (Hermitage, Côte-Rôtie and Condrieu) goes for record prices just like the wines it produces. A bottle of 2003 Côte-Rôtie produced by Château d’Ampuis, owned by the Guigal family, can sell for up to 800 US dollars! Further south near Avignon, the former papal city, a hectare with the prized Châteauneuf-du-Pape designation can go for anywhere between 400,000 and 800,000 Euros depending on its reputation. In Gigondas, a hectare has now exceeded 250,000 Euros. More affordable, Vacqueyras designations can be obtained from 100,000 Euros with Rasteau from 90,000 Euros, and Cairanne from 80,000 Euros. “The region has many truly remarkable winemaking châteaux unfortunately, they are not for sale,” laments José Canadas (Lord and Sons). “Potential buyers are willing to shell out considerable sums for the right estate.” In the Vaucluse, the majority of properties, comprising a typical farmhouse with a small vineyard, sell for between 1 and 2 million Euros. For example, close to Gigondas a farmhouse of 200 m2 with adjoining land of 8,500 m2 planted with vines, olive trees and truffle oaks (998,000 Euros). In the vicinity of Cairanne, a renovated farmhouse of 400 m2 with swimming pool and 6,800 m2 of AOP Côtes-du-Rhône Villagesis designation (1,300,000 Euros). They are primarily holiday homes. “In my opinion, prices in Gigondas will increase exponentially. We were lucky enough to sell two extremely rare properties with this designation last year”, says this specialist agent from the John Taylor group. Close to Avignon, the village of Cairanne has just become a member of the elite Côtes-du-Rhône du Vaucluse wine club. Keep an eye on this designation.
Affordable offers in the Val de Loire
In the Val de Loire, a hectare of Muscadet goes for around 10,000 Euros while Saumur Champigny, the jewel of the region, for about 70,000 Euros. But bear in mind that these average prices are just an estimate. In reality, it depends on the vines (age, exposure and terroir), which means that prices can quadruple. And don’t even think about investing in Sancerre, the market is all but closed. Due to the lack of available land even established winemakers are having to look elsewhere to diversify their range. Micro-markets are also much sought after: AOC Bonnezeaux and Quarts-de-Chaume designations only see a property change hands every three or four years. However, Muscadet still has potential. “This designation, which has been on the out since the 1990s, has undergone serious improvements, which have gone far to makeover its image. Today, 60% of the wine goes for export,” explains Alain Paineau, Head of the Domaines du Val de Loire for Quatuor Vignobles (Vinea). This agency is offering for sale a ‘prestigious estate’: a renovated 18th century house with views of the vineyard and Nantes and 22 hectares of vines (contiguous) producing “Merlot de Bourgogne that “can easily be converted to organic.” The price - between 1.5 and 2 million - is about average for an attractive local stone building surrounded by vineyards. In Anjou, owners tend to sell their wines direct to the public. One option could be to develop wine tourism in this 19th-century bourgeois house along with activities such as tennis, swimming and gîte accommodation. The business focuses on wines from Anjou and Samur.
Around twenty estates are regularly up for sale. Only four to five are contiguous with the vast majority being divided up into smaller plots. In this region, which sells nine bottles a second in the world, two sales stood out in 2017: the Bouygues family purchased Clos Rougeard, a sumptuous Saumur-Champigny, and a Chinese group acquired two châteaux in Anjou. It is the first Chinese undertaking of this type in the Val de Loire where international operators are rare.
Bordeaux still has plenty in reserve
If there is one region that has managed to consistently maintain the quality of its production, it is Bordeaux. Its winemakers, beavering away in their magic laboratories, have helped create some of the world’s most prestigious wines. In addition to the drinks business, buildings, which portray the image of the wine, are extensively remodelled by big names from the world of contemporary architecture. Recently, Jean Nouvel, the architect, and Louis Mitjaville, the Merlot specialist in Bordeaux, renovated the Château de La Grâce de Dieu, a Saint-Émilion vintage wine in the heart of this designated wine region (9 hectares producing 35,000 bottles). These wines are marketed as luxury products at 200 Euros a bottle and are sold in up-scale resorts such as Monaco, Courchevel and Saint-Tropez. The estate was bought in 2013 from a family of third-generation winemakers by Andreï Filatov, ranked as the 93rd wealthiest Russian by Forbes. According to Carol Young, manager of the Bordeaux & Beyond estate agency, “The buyer made a good purchase. The investments he has made have already increased the value of the property. If he wanted to sell today, I have a list of interested clients with very deep pockets.”
The price per hectare is around 20,000 Euros for an AOC Bordeaux designation and as much as 250,000 to 1.5 million Euros for the prized AOC Saint-Émilion designation. The average size of vineyards in the Gironde is about 19 hectares. Small properties are highly sought-after given their wine tourism potential. For example, a house (400 m2) surrounded by 20 hectares of Castillon Côtes de Bordeaux in very pretty country (996,400 Euros excluding working buildings and stock). Or this property near Saint-Émilion: three houses (two of which are gîtes), 15 hectares of AOC Côtes de Bordeaux, functioning equipment, direct sales of wine from the property at 10 Euros a bottle, pasture land and woods (1,590,000 Euros). Wine growers and villages have never competed so hard to attract the tourist dollar since the race for Médoc and Bal des Graves, and not forgetting Côtes de Bourg ‘wine aperitif” riverboat cruises. Nationwide, wine tourism attracts ten million visitors a year with 40% coming from overseas. The increase in this sector is truly astounding: + 33% since 2009 according to Atout France.