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Trends and tips for wine farm buyers

Feb 02 2015 12:53

A Fin24 user is interested in buying a wine farm. He writes:

Where can I find a medium 60ha to large 180ha wine farm?

Fin24 asked experts at Pam Golding Property (PGP) for advice:

According to Daniel Joubert, farm agent of PGP in Elgin, all they currently have available in the required size range is a farm  in the Hemel-and-Aarde Valley (Hermanus), on the market for R17m and with 20ha of vines and a total size of 60ha.


Source: Hemel-and-Aarde Valley (PGP)

Clarence Collings, PGP agricultural and commercial agent in Stellenbosch reports there has been an increase in buyers looking for wine farms, especially lifestyle wine farms or boutique wine farms with guest accommodation.

"A critical or key factor is the price and location. People are buying for lifestyle or with another business angle to the purchase," he says.

Two wine farms in the Helderberg (Golden Triangle) of Stellenbosch have sold in last eight months - one of 127 ha and one of 28 ha, both at a price of more than R60m.

Among the wine farms currently for sale in the area is Cordoba, nestled against the slopes of the Helderberg and bordering the Helderberg Nature Reserve. Its size is 86 ha and the asking price is R55m.


Source: Cordoba (PGP)

Another is a boutique wine estate of 11.6 ha and priced at 39m:


(Source: PGP)

James Visser, agricultural specialist for PGP in Paarl says in the wine farm property market there are rather dynamic changes taking place.

"Where smaller wine farms were once sustainable and able to offer a viable return, farms now need to be bigger for the same to happen. It is quite usual for a neighbour to buy adjacent land to make his farm larger and his business commercially viable," explains Visser.

He too points out the trend for lifestyle buyers entering the industry by buying smaller farms and taking the product to the next level by vinifying the wine - that is building a cellar - and focusing on marketing and selling a branded value added product.

Another trend is a number of wine farms that have been bought, vineyards removed and replanted with fruit like stone fruit or citrus.

Doug Gurr, agent at the PGP Franschhoek Winelands International office says the Franschhoek Valley is a small and prestigious destination offering  world class restaurants and a thriving wine culture.

"The farms that we sell are smaller, around 20 ha, and are deemed 'lifestyle' in that the owners live in a stunning home, overlooking their vineyard, with spectacular mountain views," says Gurr.

"They are not commercial, with no significant income being produced. The wine is made at one of the larger commercial estates for personal use and/or sold to cover the operating costs. The return for the owner is the privilege of living in a globally sought-after region."


Franschhoek (PGP)

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