Agrifrance 2018 Rural Report: Focus on the 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 2017, only a few appellations depreciated.
In numerous regions, even at entry-level (with only a few exceptions), the price for wine-growing land has risen. Over the past ten years or so, we have observed a slight improvement which is largely due to expanding world 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 last ten years, prices for all appellations have progressed by 3.7% per year, and by only 3% on average if excluding 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 €140,000 per hectare, but there are noticeable differences between regions and appellations.
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 bought and sold every year. The choice is wide, and available to all types of buyer: from €20,000 per hectare in the Bordeaux appellation to more than €3.6 million per hectare for Pomerol. Prices are rising in prestigious appellations. At €1,794,180/ha, the price for Saint-Émilion shot up by 15% compared with 2016 Pomerol, which continues to hold the record for the most expensive land in the Bordeaux region, jumped by 9.6% y/y. In Saint-Estèphe, the price per hectare climbed by 8.7% from €732,000 to €795,600. Margaux and Saint Julien are valued at more than €1.6 million per hectare. Land for Pauillac dipped by 1.7% last year but still fetches €2,704,000 per hectare. At the bottom end, appellations are gaining less momentum. Prices for Bordeaux and Fronsac picked up, rising by 3.5% y/y and 10.8% y/y, although they plummeted by more than 50% over a 20-year period.
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 per hectare of vine in the Champagne appellation varies between €1.2 million and €1.5 million. The price of vines in Champagne 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 vary between €2 million and €2.2 million.
Wine-growing land in Burgundy is rare on the market and some very emblematic sales drive up the price of Grands Crus. In the ‘Villages’ appellation, a hectare of land costs between €0.9 million and €1.4 million, whereas Premier Cru land fetches between €2 million and €3.2 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 expensive land in Saône-et-Loire and Beaujolais.
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 €1,331,720 (+4.4% y/y) versus €1,275,000 (+3.7% y/y) for Côte-Rôtie. To the south (in the Côtes du Rhône méridional region), the value of the Côtes du Rhône appellation increased slightly to €20,000 - €30,000 per hectare last year. The Côtes du Rhône Villages appellation also rose to between €35,000 and €55,000 per hectare. Prices for the region’s Cru land continued to gain momentum. Châteauneuf-du-Pape edged up by 4.3%. At €451,880 per hectare, it remains the region’s most expensive appellation.
LOIRE VALLEY REGION
Demand is essentially local. External investors show little interest in this region which nonetheless boasts many assets. The Anjou appellation lost 2.8% in value last year, with a hectare of land averaging €17,980, compared with €65,360 for Saumur-Champigny (+1% y/y).
Provence rosé is gaining in popularity, including at the international level. Land prices for the Cassis and Bandol appellations continue to enjoy steady growth. By comparison, a hectare of Bandol is now worth €165,750 (+2%) compared with €144,010/ha in Cassis. In Coteaux d’Aix, wine-growing land prices diminished to €43,670/ha (-3.5% y/y). Land in Côtes de Provence fetches between €50,000 and €60,000 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.
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