Gerhard Uys, Stuff | Jul 31 2023
Prices for sauvignon blanc vineyards in Marlborough have topped $400,000 per hectare this year, up by almost 60% on past record, the Real Estate Institute says.
Andy Poswillo, director for Colliers in Marlborough said it was a big jump from the $270,000 per hectare that the best vineyards fetched for a long time.
A number of factors influenced the price, he said.
The best vineyards delivered consistent high-quality yields, Poswillo said.
The land that attracted the most interest was not under any contractual obligations and buyers could “do what they wanted with the fruit,” he said.
Investors looked at the rate of return and the value of a vineyard came down to yield and location, he said.
Water availability and security was a major contributor to the value of land.
The price per tonnes of grapes made land attractive, he said.
Sauvignon blanc grapes harvested recently sold for up to $2200 per tonne, Poswillo said.
Real Estate Institute rural spokesperson Shane O’Brien said these sales were the only “bright spot” in the rural property market as sales continued to decline compared to last year.
The institute’s data showed there were 166 fewer farm sales for the three months ended May than for the same three months ended May 2022.
“The reduced number of sales is impacted by buyers continuing to take a wait-and-see approach to buying amidst the backdrop of higher interest rates, farm expenses increasing and lower farm incomes off the back of adverse weather and challenging economic conditions,” O’Brien said.
O’Brien said the sale of two established vineyards was at a price per hectare never seen before.
“In Marlborough sales are now being reported at record levels for good quality sauvignon blanc land and more land is being acquired for further development in grapes,” he said.
The recent uptick in wine exports and free-trade agreement with the UK gave the industry “renewed confidence,” O’Brien said.
Chief executive of New Zealand Winegrowers Philip Gregan said earlier this month wine exports for the year to May were worth $2.4 billion, up 25% on last year.
Sarah Wilson, general manager for advocacy at New Zealand Winegrowers, said under the UK free-trade agreement technical barriers to trade would be removed, and certification and labelling requirements minimised.
Marcus Pickens, general manager for Wine Marlborough, said the phenomenon of good sales for sauvignon blanc vineyards was not new, with ongoing growth in the industry for the last 30 years.
“It’s a continuation of the growth trajectory.
“There could have been an uptick and land conversion into viticulture. The world discovered sauvignon blanc in the 1980s and there’s been growing demand ever since. Other varieties grow very well, but sauvignon blanc gets all the attention,” Pickens said.
Marlborough had “nice warm days” in the growing season and “quite cold nights which was good for flavour development,” he said.
Of Marlborough’s about 30,000 hectares of vineyards, about 24,000ha was planted to Sauvignon Blanc, Pickens said.
The vineyard area grew by 29% in the last 10 years, but it was hard to say if this trend would continue, he said.
Marlborough had a record harvest last year, after a small harvest in 2021 brought about by poor fruit set, he said.
This year’s harvest was marginally less than last year because of an abnormal summer, Pickens said.
“As a wine industry we have been careful to map planting planning with consumption demand as we do not want to oversupply the market, just grow our premium offering at the same pace as demand grows,” Pickens said.
The median price per hectare for dairy farms for the three months ended June this year was up 3.1% compared to last year, for finishing farms it was down 4.8%, up 5.3% for grazing farms and down by 25% for horticulture, Real Estate Institute data showed.
