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FINANCE Wine Industry Finance 2013 The Price of Prestige Prime French vineyard properties soar while ordinary land languishes By Paul Franson I f you've seen the prices that some Napa Valley vineyards have sold for, you may be aghast. But the prices of prime grapegrowing property in Bordeaux and Burgundy, France, are even more staggering. While top vineyards in California have commanded $350,000 per acre (not counting the value of homes and wineries on the properties, or associated brands), those in Bordeaux's top appellations can sell for $800,000 per acre (1.5 million euros per hectare). Land in France's famed Champagne region averages about $600,000 per acre. In Burgundy, the celebrated grand cru vineyards average more than $2 million per acre, and a few small vineyard parcels have sold for up to $16 million. highlights Paris FRANCE • evere governmental restrictions S about expanding vineyards can hamper growth plans. Wines & Vines recently contacted multiple sources to determine current prices for planted, producing vineyards. Property with estates, wineries and established brands can cost far more, while unplanted land is generally cheaper but very difficult to plant because of government regulations. 40 W in e s & V i ne s s e pt e mbe r 20 13 Burgundy Cote de Nuits Cote de Beaune Lyon Bordeaux Pauillac St. Julien Margaux PessacLeognan Pomerol St. Emilion Rhône Valley Gigondas Chateauneuf-du-Pape • op vineyard land in France T commands very high prices compared to property in U.S. wine regions. • ess-famous French areas dropped L in price during the recession, while prices in top appellations grew as much as tenfold. Champagne Languedoc World's most expensive Vineyards in France's top regions are the most expensive in the world. One of the leading brokers of French vineyards is Vinea Transaction. Adam Dakin, a Scot who has lived in the Rhône Valley for many years, is one of the firm's representatives at Vignobles Investissement, an affiliate of Vinea Transaction in Languedoc and the Rhône Valley. He represented Robert Mondavi Winery in what he called its "very sadly" failed attempt to acquire land and establish a winery in the region in southern France. He also helped Goelet Wine Estates, the parent company of Napa Valley's Clos du Val winery, acquire a vineyard, Château de Nizas, near the southern French city of Pézenas. Nice Prices in greater Burgundy can range by a multiple of 100, from outlying areas to grand crus, Dakin said. "There are recent sales in Burgundy where they literally count the individual vines to calculate the value in the most prestigious crus, like 3,000 euros per vine times 10,000 vines per hectare." He said that Chinese buyers have bought as many as 50 lesser estates in Bordeaux during the past few years, and many are still looking. "They haven't generally bought top estates, but generic properties." A Chinese buyer did buy a top estate in Burgundy. Locals were up in arms when Louis Ng, a casino tycoon from Macau, bought Chateau de Gevrey-Chambertin for an unprecedented figure of $10 million. The