I am often asked how many Bordeaux vineyards are for sale at any one time. It is difficult to put an accurate figure on this, not least because many properties are sold “off market”, without any advertising. My own database, which includes both advertised and off-market properties, currently includes a total of 138 properties with 3,040 hectares of vines. Intervignes.com, a French website dedicated to vineyard sales, currently has a total of 152 advertisements for Bordeaux vineyards, although several properties appear more than once.
According to the latest CIVB figures there are 6,287 growers and a total winegrowing area of 112,200 hectares in Bordeaux so, based on my data, approximately 2.7% of the total area is currently for sale. This figure is in line with the SAFER’s annual report of activity in the Bordeaux vineyard market, which recorded 3,208 hectares of Bordeaux vineyards changing hands in 2017, equivalent to 2.9% of the total surface area.
To obtain a more detailed picture of the market I have looked at the number of properties and the total area being offered for sale in different regions, as well as the size of individual properties and their asking prices.
|Bordeaux||Côtes de Bordeaux||Médoc and Graves||Saint-Emilion, Pomerol, Fronsac||Other||Total|
|% of total winegrowing area||47%||12%||18%||11%||12%||100%|
|Number of properties for sale||31||51||23||31||2||138|
|% of total||23%||37%||17%||22%||1%||100%|
|Area for sale (hectares)||827||976||744||426||67||3,040|
|% of total||27%||32%||25%||14%||2%||100%|
|Average||€2.2 million||€2.3 million||€7.5 million||€6.8 million|
|High||> €10 million||> €15 million||> €25 million||> €30 million|
The “regional” appellations of AOC Bordeaux, Bordeaux Superieur, Bordeaux Rosé and Crémant de Bordeaux accounted for almost 47% of the total Bordeaux winegrowing area in 2017. You might therefore expect this area to account for the largest number of vineyards for sale. However, I have identified just 31 properties and a total of 827 hectares of vines for sale in these appellations. This equates to just 22% of the total number of properties and 27% of the total vineyard area currently offered for sale.
Although the economics of operating a vineyard in these appellations are challenging, the estates tend to be larger, offering greater economies of scale and thus less pressure on margins. In addition, many producers in these appellations sell their wine in bulk or belong to a cooperative, which tends to offer greater stability of distribution, albeit at the expense of profitability.
Unsurprisingly, there is a very wide range of properties offered for sale, ranging in size from 5.2 hectares to 80 hectares and in price from just under €425,000 to over €10 million, with an average asking price of €2.2 million.
In recent years the market for vineyards in these appellations has benefited from their relative affordability and the fact that they frequently include attractive houses. As a result they have proved particularly popular with Asian buyers.
Côtes de Bordeaux
This area includes the Bourg, Blaye, Cadillac, Castillon, Francs, Graves-de-Vayres and Saint-Foy appellations, which accounted for 12% of the total Bordeaux winegrowing area in 2017.
There are more vineyard properties for sale in the Côtes de Bordeaux appellations than in any of the other main groups of appellations. I have identified 51 properties for sale in these appellations with 976 hectares of vines; 37% of the total number of properties and 32% of the total vineyard area offered for sale.
A number of factors have contributed to the high number of vineyards for sale in these appellations. Most estates are relatively small in size, usually between 10 and 15 hectares, so their production costs are typically higher. As margins are squeezed, many estates have struggled to remain viable. The Côtes de Bordeaux appellations are also less well-known in export markets, accounting for just 5% of total exports in 2017, adding further pressure on distribution and profitability. Finally, with many estates being family-owned, succession issues are often a factor in properties being put up for sale.
The Côtes de Bordeaux appellations offer a wide choice of properties. The 51 estates currently offered for sale range in size from 3.5 hectares to just under 80 hectares, with prices ranging from €170,000 to over €15 million, and an average asking price of €2.3 million. However, the quality of what is on offer is also variable. The properties currently for sale includes some of the best estates in these appellations, with high quality vineyards, modern technical installations and good distribution. However, many properties require significant capital expenditure and/or suffer from poor distribution.
In spite of the above factors, the Côtes de Bordeaux appellations include some exceptional vineyards making increasingly high-quality wines. They continue to appeal to buyers from outside the industry and the region, who are attracted by their relative affordability, attractive accommodation and picturesque settings. These appellations offer good opportunities for buyers with a more modest budget, provided they have the attributes to develop a brand and distribution.
Médoc and Graves
This area covers all of the Left Bank, except the sweet white wine appellations, and accounted for 18% of the total Bordeaux winegrowing area in 2017. It includes the Graves, Pessac-Léognan, Médoc, Haut-Médoc, Margaux, Saint-Julien, Pauillac, Saint-Estèphe, Moulis and Listrac appellations. I have identified 23 vineyards for sale in these appellations with 744 hectares of vines; 17% of the total number and 24% of the total vineyard area for sale.
While there are seven properties currently being offered for sale in Graves there are none in Pessac-Léognan. This reflects the continued lack of supply in this much sought-after appellation, which has seen average vineyard prices increase by 210% between 1998 and 2017, from €145,000 to €450,000 per hectare. There is also relatively limited supply in the Médoc appellations, with only 16 vineyards for sale, most of which are located in the Médoc, Haut-Médoc, Listrac and Moulis appellations. While estates in Margaux and Saint-Estèphe do occasionally come onto the market, it is extremely rare to see any properties in Saint-Julien or Pauillac offered for sale and with more than 90% of the vineyards in these appellations owned by Grand Cru Classé estates this situation is unlikely to change.
There is a greater range of both size and price in these appellations than in the Bordeaux or Côtes de Bordeaux regions. The 23 estates currently offered for sale range in size from just one hectare to 135 hectares. Asking prices range from €650,000 to over €25 million, with an average of just over €7.5 million, reflecting the higher land values. While investing in these appellations, particularly in the Medoc, typically requires a larger budget, better notoriety and higher prices for the wines, coupled with greater economies of scale, means that this initial investment is generally offset by better financial performance.
Saint-Emilion, Pomerol and Fronsac
This region includes the Saint-Emilion and Saint-Emilion Grand Cru, Saint-Emilion satellites, Pomerol, Lalande-de-Pomerol, Fronsac and Canon-Fronsac appellations, which accounted for 11% of the total Bordeaux winegrowing area in 2017.
Situated at the heart of the Right Bank these appellations cover over 12,000 hectares and are home to some of the most expensive vineyards in Bordeaux. I have identified 31 vineyards for sale with 426 hectares of vines; 22% of the total number and 14% of the total vineyard area for sale.
Estates in Pomerol and Grand Cru Classé estates in Saint-Emilion are rarely offered for sale and most transactions take place off market. However, with more than 5,300 hectares of vines and over 800 growers there are opportunities to acquire vineyards in Saint-Emilion. Alternatively, the surrounding satellite appellations (Montagne, Lussac, Puisseguin) and Fronsac offer more affordable options. There are just two properties currently for sale in Pomerol, while there are 10 estates for sale in the Saint-Emilion satellites.
Properties are typically much smaller in this region – of the 12 properties currently for sale in Saint-Emilion, only three cover more than 10 hectares. Higher land prices in Pomerol and Saint-Emilion are reflected in the average asking price in these appellations – €8.6 million for the 14 properties currently offered for sale – but this drops to €4.8 million for the 13 properties currently for sale in Fronsac and the satellite appellations.
Unsurprisingly for such a large wine region, there is a huge variety of properties for sale at any given time in Bordeaux. However, many of the properties currently offered for sale are overpriced, require significant investment or simply do not represent viable business opportunities. Buyers and their advisors therefore need to be highly selective and focus on the business case for a proposed acquisition. Not only must they ascertain the true value of the assets and any capital expenditure requirements, they must also assess the current and potential viability of the business, with a particular emphasis on production costs and distribution.