Viticulture Market Update

A big driver of viticulture land sales – particularly in Marlborough – is widespread sentiment that this demand for New Zealand wine is likely to continue, meaning wine companies need to secure longer-term access to fruit supply.

Properties with a short-term grape supply contract or short-term lease in place ensure that purchasers have imminent access to fruit and some certainty around future supply.

It’s not just wine companies investing in grape land either – other investors including iwi groups are widening their asset net and looking to place capital in large acquisitions.

In Marlborough, the central Wairau Valley has historically drawn premium prices, however, the outer areas like Awatere are catching up and starting to compare favourably – where yields and risk profiles are comparable.

There has also been a notable volume of properties coming to the market as retiring grape growers have been tempted by good land prices being attained.

We are having a lot of conversations with clients around succession, as owners consider releasing equity from their viticulture assets.

Another interesting trend is where large tracts of land are being repurposed from food production into leasehold vineyards, where owners have identified an opportunity to have a relatively hands-off investment as landlords within the wine industry.

It’s been a relatively tough season for Hawke’s Bay, Gisborne and East Coast grape growers with a significant amount of rainfall in recent months, combined with the humid cyclone weather that has occurred.

Hence the vintage in those regions this year is very much a mixed barrel.

The early varieties came in better than anticipated, however, yield numbers were down across the board and there’s been tank space left in many North Island wineries.

This contrasts with the Marlborough season where a massive rain event in February, followed by humid weather, threatened a clean finish in the lead up to the vintage.

Crop yields, however, were above average and of good quality – expected to translate to fresh and lighter wines, fuelling a good year for aromatic varieties.

With all Marlborough wineries reporting full tanks and no space available, surplus capacity at wineries in the North Island presents the opportunity to ship juice north and replenish the shelves globally.

Meanwhile, further south and having avoided any major climatic events, Central Otago arguably had the best harvest in the country for 2022, achieving good volumes and great quality.

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