Summer dreaming: 2012 vintage property sales start bearing fruit

The year ended with some signs of optimism for the wine industry and vineyards with fruit prices higher, more interested buyers, some long-listed properties selling and fewer distressed sales.

There was also good news for the South Australian vineyard owners and winemakers with state government announcing that the Barossa and McLaren Vale regions would be protected from residential subdivision, following the passing of both the Character Preservation (Barossa Valley) Bill 2012 and the Character Preservation (McLaren Vale) Bill 2012.

Announcing the plans to protect wine-growing land, South Australian planning minister John Rau, said “a line in the sand has now been drawn on Adelaide's urban sprawl”.

South Australia is Australia’s wine-country heartland with nearly one-third of vineyards in the state, representing nearly half (48%) of Australia's wine production, according to ABS figures.

The state also dominates current vineyard listings with 14 of the 26 properties listed for sale on realestate.com.au being South Australian vineyards.

Investors with a penchant for these trophy assets can still pick up picturesque vineyard properties under the $1 million mark including the historic Craigie Knowe Vineyard and Homestead (pictured above and below) on the Tasmanian east coast up for sale with offers sought over $800,000. It has five hectares of vineyards and a B&B.

Another sub-$1 million offer is this (below) vineyard estate in Victoria’s Pyrenees seeking around $750,000 and promising plenty of kangaroos, sweeping views of the Pyrenees ranges plus 13 hectares of vines.

Investors with a bit more cash to spare and seeking vineyards plus a much-admired homestead may be interested in the 1904 Nyrang Homestead at Molong (pictured below) listed for sale with $1.5 million hopes in November. The homestead is regarded as one of the finest examples of Australian architecture and construction and comes with five hectares of productive vineyards with plantings of shiraz, cabernet sauvignon, ruby cabernet, sauvignon blanc, merlot, chardonnay, pinot noir and sangiovese.

Focusing on the top end of the market in its 2012 rural and agribusiness report, Colliers International reported that while the Australian dollar and increasing competition from overseas markets continues to add pressure, the vineyard segment "is beginning to rebound, albeit slowly”.

In their end-of-year report, valuers at Herron Todd White said that after more than five years of decline, the wine grape sector “appears to finally be on the improve, with increased demand from wineries resulting in improved prices in 2012”.

“Prices are expected to remain at similar the supply/demand equation is reaching a balance after nearly ten years of oversupply and the industry’s outlook is brighter.

“Wine grape vineyard sales throughout 2012 definitely showed a firming of values, which suggests there are buyers who wish to enter the industry while values are at historically low levels,” says Herron Todd White.

Looking ahead to 2013, Treasury Wine Estates, the former wine arm of Fosters, says it will look to acquire vineyards as they become available.

But it remains a tough, buyers market.

Colliers International vineyards specialist Tim Altschwager says conditions remain difficult with prices having fallen by around 30% to 50% over the past few years, though rising grape prices and recent sales are encouraging buyers back into the market.

Over the course of the year, some well-known wineries fell by the wayside with the decision taken by creditors to liquidate the former ASX-listed Coonawarra Australian Property Trust and sell 333 hectares of vineyards famous for cabernet sauvignon and Shiraz wines with similar vineyards in the Coonawarra area have recently attracted figures in excess of $20,000 per vine area. Expressions of interest closed at the end of July, but no sale has been announced.

Certainly the dominant theme for 2012 was one of improvement and better prospects for the futre.

ABS figures suggest improved productivity, noting that  while the area of grape vines in Australia has decreased by 6% since 2010, “thanks to favourable seasonal conditions there's still plenty of wine”, with wine grape production increasing by 3% to 1.6 million tonnes.

It has been a pretty consistent year for vineyard transactions with a number of noted properties selling.

A recent sale was that of boutique winery Parker Coonawarra Estate, which sold nearly a year after Nufarm CEO Doug Rathbone put the winery along with other wine assets – Yering Station and Mount Langi Ghiran in Victora and Xanadu in Western Australia – up for sale to repay debt. The winery was sold to Hesketh Wines for around $6 million to $7 million, according to the Stock and Land.

The Rathbone Wine Group, run by Darren Rathbone, will continue to bottle Parker wine and reported a 15% rise in wine sales over the calendar year.

Another recent sale was Brookhampton Estate near Donnybrook, an iconic vineyard producing mainly red wines and also operating as a concert venue in the south west of Western Australia. It sold in October through Brian Moulton of Acton South West – Dunsborough. Expressions of interest had closed in May. RP Data lists a sale price of $3 million.

In August, Property Observer reported that Western Australia's well known Clairault Vineyard (pictured below) has been sold to American entrepreneur John Streicker for a $12 million.

Earlier in the year, a number of sales were concluded by receivers.

The Pettavel winery in Geelong, which went into voluntary administration in April 2011, was sold to a group of local investors in May for $3.65 million.

Also in May, the now de-listed Cheviot Kirribilly Vineyard Property Limited (CKP Group) announced the sale of its Tullymore Vineyard for $ 2 million to reduce its debt obligations as part of plans announced in December 2011 to sell all six properties in its vineyard portfolio.

In January CKP reported that four of the properties in the portfolio had been sold, including Birchmores vineyard and Woodstock Road vineyard in Langhorne Creek and Angas Creek stage 1 and stage 2 vineyards in the Adelaide Hills for a combined price of circa $9.5 million. The last remaining vineyard, Kirrbibilly Estate 1 in the Clare Valley with 214 hectares of vineyards went to auction through Colliers in June but failed to sell. It is listed as “under contract” through Tim Altschwager.

In March, the assets of Crestview Pty Ltd, which include Step Road winery at Langhorne Creek; which produces a number of well-known brands, including Step Rd and Beresford Wines, was sold for $3.5 million.

In February, Clarendon vineyard in the McLaren Vale region sold to US wine company Jackson Family Wines, for around $8 million. The property comprises around 184 hectares and around 80 hectares planted with vines. It was originally placed on the market in 2010.

And in January, Xingfa Ma, one of China’s richest men, bought a 72% share in WA's Franklin River district Ferngrove  Wines for $10 million. It includes two vineyards in Franklin with an area of approximately 225 hectares planted with premium vines.