Investing in UK wine land is gaining popularity with HNWs

Winelands are a popular new asset class in the UK – and estates in prime locations look like a safe bet, Tim Relf discover

The UK may not be quite close to replacing Champagne as a wine region, but climate change has certainly sparked renewed interest in wine production in Britain – and this has created a new real estate market in wine land.

Met Office data shows the UK has warmed by 1°C since the 1950s and suggests that by 2070 summers could be between 1°C and 6°C warmer than in the 1990s This trend has prompted bullish forecasts, despite the challenges for winemakers from more frequent and intense extreme weather events also associated with climate change. A 2018 report from the University of East Anglia identified 86,000 acres (35,000 hectares) of land potentially suitable for the business. This is nearly 10 times the area currently planted with vines in the UK. This land is being grabbed by winemakers wanting to expand, farmers looking to diversify, and HNWs wanting to enter the sector or buy a nice slice of countryside, or simply see it as a good investment.

According to Matthew Berryman, land and viticulture consultant at property management consultancy CLM, the best ‘bare’ land suitable for planting vines changes hands at over £25,000/acre (£62,000/ha) . Arable land usually trades between £7,500 and £15,000/acre in the South East.

But not all wine countries are created equal. The perfect spots are on chalky, free-draining, south-facing ground, less than 300ft above sea level – but beauty is also important and, in terms of London investors, access so is it. People may not want to spend four hours driving to their idyllic estate.

“If you’re looking for a safe, long-term investment, it makes sense to buy the best you can afford, even if it seems expensive now,” Berryman says. “It’s the same with farmland – the value will always be underpinned by its scarcity.” The land market is, he adds, remarkably resilient to recession, in part because it is seen as a safe haven for funds in times of global turmoil.

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As in any market, the prices paid depend on who wants it and how much they want it. “Values ​​skyrocket if two people are desperate for the same patch,” Berryman says. “As the viticulture market matures, we will see more differentiation between the best and the rest. Regions that have a proven track record in wine production and considered ‘trendy’ – such as Sussex – look set to demand higher prices.

This two-tier market has been around for a long time in France, according to Alexander Hall, who runs a wine property business in Bordeaux. The global explosion in the production of relatively inexpensive “generic” wines over the past 20+ years has rendered many French vineyards unviable, driving down prices in some areas. “At one end of the scale you can hardly give away land, but sometimes even just 20 minutes exorbitant sums are paid,” says Hall. “Small bits of land in the most sought-after areas that have iconic brands and produce super premium wines are changing hands for huge sums…It’s like buying a house on the most expensive street in London or Paris.”

Whatever their motivations, prospective buyers should always take the time to understand the intricacies of what they’re buying, he advises: “Don’t buy the dream, buy the business. A UK business that many would also consider a dream is Blackdown Ridge – a winery in West Sussex with over 12 acres of vines, currently for sale with Knight Frank with a guide price of £4,950,000. In addition to three houses, it has the capacity to produce up to 30,000 bottles of still and sparkling wines.

Knight Frank rural research manager Andrew Shirley noted that estate owners were increasingly looking to diversify their sources of income since Brexit and changes to agricultural support, with some exploring wine-related opportunities. “Viticulture also appeals to many as they are already keen collectors or investors in wine and have seen the value of their collections rise sharply in recent years,” he says.

Berryman also noticed that the city’s money was moving into the sector: “Capitalizing on viticulture is a long-term proposition, but it’s an exciting, rapidly changing market and, in terms of options real estate investment, it is worth considering.”

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