Big profitable Martinborough vineyard

2:29 PM Friday September 9, 2016 Colin Taylor

Southdown Estate Vineyard in Martinborough is on the market for $6.3 million.

The sale of large vineyard property in Martinborough in the South Wairarapa district offers the chance to buy a significant land holding and ownership of a profitable and well-managed vineyard.

“It presents an opportunity to invest in a high-growth export sector,” says Mike Laven, rural and agribusiness broker for Colliers International, who is marketing Southdown Estate Vineyard, at 24 Vineyard Lane, Martinborough for an asking price of $6.3 million.

“Southdown Estate produces sauvignon blanc grapes for some of New Zealand’s best-known wine companies,” Laven says.

The prime 42 hectare sauvignon blanc block vineyard produced 559 tonnes of sauvignon blanc grapes in the 2016 harvest at 13.3 tonnes per hectare.

“With sauvignon blanc grapes selling this year for over $1800 per tonne, this vineyard investment earned a profit of almost $12,000 per hectare for its owners.”

Laven says global demand for New Zealand sauvignon blanc continues to grow, based on the variety’s excellent international reputation. “This means wine companies need more grapes just to keep up with demand,” he says.  

“Most of New Zealand’s largest wine companies are experiencing strong growth in demand for sauvignon blanc, particularly in the US market, so they are actively seeking additional supply sources which will secure enough grapes for future production.”

Laven says sauvignon blanc accounts for 86 per cent of New Zealand’s annual wine exports, meaning demand for high yielding, well-managed sauvignon blanc vineyards is at peak levels. “Sauvignon blanc has historically driven most of the New Zealand wine industry’s growth and this trend is expected to continue.”

New Zealand wine exports increased 10 per cent in the past year to just under $1.6 billion and the sector is confident that its target of $2 billion of export sales will be achieved by 2020.

“This has prompted investors such as local and offshore funds and syndicates to actively look for acquisition,” says Laven.

“For example, MyFarm, which is a seasoned investor in dairy farms, has recently announced that it is diversifying into vineyard syndication. To date, buyer attention has been focused on Marlborough where the preference is for larger blocks of 30 hectares or more, but there is now a shortage of vineyards available for sale there which has led to a supply and demand imbalance that has driven prices upward.

“Depending on location and levels of productivity, prices for the most productive sauvignon blanc blocks in Rapaura and the Lower Wairau have increased to over $200,000 per hectare.

“With demand remaining strong and large scale vineyards in short supply, attention is shifting to other wine regions like Martinborough and Hawkes Bay where productive sauvignon blanc blocks can be purchased for prices well below prime Marlborough prices.”

Laven says grapes from those regions can be used for blending with Marlborough sauvignon blanc as well as for production of local or regional wines.

He says Southdown Estate is managed by Vine Managers, a Wairarapa based vineyard management company established by Nick Hoskins who is recognised as one of New Zealand’s leading viticulture consultants.

True Commercial - Mike Laven%2c Colliers International .jpg

Mike Laven, Colliers International.