The week is an intense week of meetings, presentations and networking within the international wine producing and vineyard community. Lily was in her element with the media excited about her role as a Bordeaux vineyard professional from China. She was interviewed extensively on Chinese television and was in demand with Asian news and magazine publications.
Karin Maxwell was a keynote speaker at the Vinexpo hosted conference that focused on the vineyard purchasing process. MSB was invited to present at Vinexpo a few weeks ago and was joined by our highly respected partners Ernst & Young whom we often recommend for their excellent investigation work during the purchase process. In the audience was Chris Mercer from Decanter.com who reported that “prospective Asian buyers of Bordeaux chateaux packed a seminar room at Vinexpo Asia Pacific this week to learn about the process of purchasing an estate-suggesting more deals are on the horizon.” He is right; we continue to see a steady stream of Asian investors, mainly from China and Hong Kong, but also from South Korea, Indonesia and Thailand. Although there are some vineyard investors still looking for trophies, the majority are seeking a return on their investment from a sector and asset class that they find emotionally appealing. Mercer went on to say that “several prospective buyers….told Decanter.com that they were actively seeking to invest.”
Also present was Michel Lachat from the SAFER who oversees the large Entre-deux-Mers region of the right bank in AOC Bordeaux. Mercer reported that “Lachat said the profile of investors has changed in recent years, with more buyers interested in producing and selling wine. ‘At the beginning we had very non-professional investors. They just liked the look of the house, the place.’”
He also noted that “… land prices vary significantly between appellations in Bordeaux. Pauillac is the most expensive, with an average price of €2m per hectare.” It is always important to remember that when the SAFER quotes a land price it is an average (see our previous blog posts on this topic).
According to Mercer, Karin Maxwell told the audience that prices look relatively attractive in several appellations, having not risen significant in the last few years.
‘We can’t predict the future, but we seem to be coming out of the bottom of a cycle. As far as we can see from previous cycles, we are at a moment which is a good time to invest.’
Of course you might predict we would say something like that, but it is looking interesting at the moment and the inventory of product on the market is as strong as we have seen for a while without there being any significant upward pressure on prices.