My prediction at the start of the year that “2014 is unlikely to see any significant let-up in demand from Chinese buyers” (see Review of 2013 and predictions for 2014) has proved to be slightly wide of the mark. Since the begining of the year the number of transactions involving Chinese buyers is noticeably lower than in the past few years, as is the number of inquiries, although they are still an active force in the market. There are several factors that are likely to have contributed to this cooling off in demand. I was recently contacted by one would-be buyer who was concerned whether it was the right time to invest in a Bordeaux vineyard, citing reports that some of the first wave of Chinese buyers were already considering selling their properties “because they are not capable of running the business”. Such reports, whether true or not, have no doubt unsettled some potential investors, reinforcing their concerns over the difficulties of managing a vineyard across both geographical and cultural boundaries. Another major factor is the current clampdown on corruption in China, which has lead to reduced demand for Bordeaux wines, which are frequently purchased as gifts rather than for personal consumption. The reports in June that the Haichang Group, which has acquired at least 10 vineyards in Bordeaux since 2010, is being investigated for the misuse of public funds in association with these purchases will no doubt also have made both buyers and sellers more wary.

Meanwhile there has been a noticeable pick-up in demand from sectors with more established links to Bordeaux, notably the UK and US, with a marked increase in enquiries as these economies show the first signs of recovery. However, my prediction that foreign buyers are “unlikely to displace French investors as the principal buyers of prime Bordeaux vineyard assets” was much closer to the mark. Of the chateaux sold to date in 2014 (see Summary of recent transactions – September 2014), the majority of those in the most prestigious appellations have been sold to French buyers, notably Chateau Chauvin in Saint-Emilion, which was sold to Sylvie Cazes, co-owner of Chateau Lynch Bages, and Chateau Beauregard in Pomerol, which was sold to the Moulin-Houzé and Cathiard families. In March Francois Pinault’s Artermis Holdings, which owns Chateau Latour, acquired a stake in the Guichard family estates, Chateau Siaurac in Lalande-de-Pomerol, Chateau Prieuré in Saint-Emilionn and Chateau Vray Croix de Gay in Pomerol, and two other classified estates in Saint-Emilion are also rumoured to have been sold to French buyers in recent months. According to a recent article in the Sud Ouest, more than 75 of France’s wealthiest individuals and families own vineyards in France, with the majority of these being located in Bordeaux (see 75 of France’s richest people own French vineyards).

Demand continues to oustrip supply in Saint-Emilion and Pessac-Léognan in particular, with a number of investors looking to acquire estates in these two appellations,  which are viewed as offering the best balance between current affordability and long-term potential. However, investors from outside the sector are increasingly losing out to well financed and better placed local interests in the competition to acquire assests in these appellations on the rare occasions that they do come onto the market.