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#Vineyards — 30.05.2019

Agrifrance Report 2019: Wine-Growing-Land in France

With the French wine sector in better economic shape, the price of wine-growing land rose in most appellations in 2018; only a few appellations depreciated.

Agrifrance Report 2019 I BNP Paribas Wealth Management

Over the past ten years or so, there has been a real improvement in the market that is largely due to expanding global consumption and a strong momentum in exports.

This trend is chiefly driven by Champagne, but also by other regions such as Bordeaux (largest market by value), Burgundy, Côtes du Rhône and Provence. Over the past ten years, prices for all appellations have progressed by 3.7% per year and by only 3.3% on average if we exclude Champagne.

As for farmland, nearly one in three hectares is sold with a tenant in situ and transactions represent less than 2% of the total surface area. The average price of wine-growing land is close to €144,000 per hectare, but there are noticeable differences between regions and between appellations.

Vine prices in France since 2008 - Agrifrance I BNP Paribas Wealth Management

Vine Prices in France since 2008 (€/ha)

RÉCOLTE 2017 EN HAUSSE

The French wine sector: highest prices in 2018 in France (€/ha)

Bordeaux region

The market for wine-growing land around Bordeaux is extremely buoyant. Around 2% of the region’s 115,000 hectares of land (i.e. 2,500) is sold each year. The choice is wide, and available to all types of buyers: from €26,000 per hectare in the Bordeaux appellation to more than €3.8 million per hectare for Pomerol.

Prices are rising in the prestigious appellations. At €1,974,960 per hectare, the price for Saint Émilion shot up 10.1% compared with 2017. Pomerol, which continues to hold the record for the most expensive land in the Bordeaux region, appreciated by 5.4% y/y. In Saint Estèphe, the price per hectare climbed by 6.9% from €795,600 to €850,150. Margaux and Saint Julien are valued at more than €1.6 million per hectare. Land for Pauillac edged up 2.5% last year and is now worth €2,771,620 per hectare.

At the bottom end, appellations are gaining less momentum. Prices for Bordeaux picked up (+2.5% y/y) although appellations have lost more than 50% in value over the past 20 years.

Champagne region

The Champagne market remains very active and is the leader by value. The market is driven by the sale of small surface areas averaging around 15 ares (1 are = 100m2). This makes them accessible to a large number of buyers who are mostly established wine producers. The average price of vine in the Champagne appellation varies between €1.2 million and €1.5 million per hectare. The price of vine in the Champagne appellation has edged up by 3.4% per annum over the last ten years.

In the highly-prized Côte des Blancs area, the average price per hectare can range between €2 million and €2.2 million.

Burgundy region

Wine-growing land is Burgundy is rare on the market and some very emblematic sales are driving up the price of Grands Crus.

In the ‘Villages’ appellation, a hectare of land costs between €0.8 million and €1.5 million, whereas Premier Cru land fetches between €2.4 million and €3.4 million for the top appellations.

Meanwhile, prices for very rare Grands Crus are rocketing. This tension on the market is having repercussions across the whole region and Côte d’Or winemakers are keeping an eye out for less known vineyards in the Jura, Saône-et-Loire and Beaujolais regions. 

Côtes du Rhône region

In the north of the region, the market is overstretched and prices in Côte-Rôtie and Hermitage can easily top €1.2 million per hectare. Land in the Hermitage appellation commands as much as €1,384,990 per hectare compared with €1,281,250 for Côte-Rôtie, which only edged up by 0.5% y/y.

To the south (in the Côtes du Rhône méridionales region), the value of the Côtes du Rhône appellation shot up by 8.7% to €25,000 – €33,000 per hectare last year. Prices for the region’s Cru land continued to gain momentum. Châteauneuf du Pape advanced by 7.9%. At €487,650 per hectare, it remains the region’s most expensive appellation.

Loire Valley region

Demand is changing and there is a renewed interest in Chenin (white-wine grape variety). Non-local investors are starting to look at this region, which boasts many advantages. The Anjou appellation appreciated (+8.1%) for the first year to €19,440 per hectare, while Saumur-Champigny only edged up by 1.5% to €66,340 per hectare.

Provence region

Provence rosé is gaining in popularity, including at the international level. Indeed, land prices for Cassis and Bandol appellations continue to enjoy steady growth. By comparison, a hectare of land in Bandol is now worth €169,890 (+2.5%) compared with €148,330 in Cassis (+3%).

In Coteaux d’Aix, wine-growing land prices rose to €46,040 per hectare in 2018 (+5.4% y/y). Land in Côtes de Provence fetches between €50,000 and €66,000 per hectare. Prices for Côtes de Provence in coastal areas are on the increase with land currently worth between €120,000 and €150,000 per hectare.

TAXATION 

New French law on the transfer of farms and vineyards (since 18 January 2019)

Until now, the transfer via gifting (donation) or inheritance (succession) of rural properties given on a long-term lease or on a leasehold transferable outside the family framework, as well as units in agricultural land groupings (GFA) have been subject to an exemption of transfer/inheritance tax under certain terms and conditions.

Transferred properties were exempt at 75% of the value up to €101,897, then at 50% above this amount. Since the new law of 18 January 2019, and in order to favour the transfer of farms and vineyards, this 75% threshold has been raised to €300,000 for probate estates opened and gifting registered after 1 January 2019.

 

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About Agrifrance

Agrifrance is the specialist rural property division of BNP Paribas Wealth Management, Wine making properties, beautiful prestige homes, agricultural fields, forest areas. With more than 40 years of experience in this area, Agrifrance supports its clients in their heritage approach. With its network of recognised professionals, Agrifrance is also able to provide complementary services such as expertise in and management of rural properties.
For almost 20 years, Agrifrance has been producing an annual report that provides insight into rural land investment. This year, the study focuses on the rural land market in Britain.

Agrifrance is one of the asset diversification services proposed by BNP Paribas Wealth Management alongside Private Equity, Real Estate and Art Advisory