Burgundy vineyard prices soar higher and higher

Ever thought about investing in Burgundy vineyards? Burgundy is not only very famous, frustratingly difficult to understand, small, unique, complex, now one of UNESCO’s world heritage sites, but also, as you would imagine, highly expensive. The average cost of buying a grand cru vineyard in Burgundy (which by the way is France’s most expensive wine real estate), rose by 5.3% in 2013…and keeps increasing. These vineyards are all but impossible to acquire…

Burgundy is unique in that it is made up of over 2000 estates, the majority of which are less than 10 hectares (25 acres) and in the famous “Côtes de Nuits & Côtes de Beaune” districts (2 out of 5), which cover only 50 km or 30 miles.

Still hungry for more figures? Burgundy has 559 hectares (1,398 acres) of Grand Cru and 3326 hectares (8,315 acres) of 1er Cru (or first growths). Although primarily a white wine region (60%) known for its great Chardonnay, the Pinot Noir accounts for 56.8% of Grand Cru wines and 44.2% of first growths.

So is it easy to purchase a Burgundy estate. No. Unlike Bordeaux, where the “chateau” is in the middle of its vineyard and where you see all you own, Burgundy estates are huddled together in a necklace of villages and their vineyards are found spread over different areas between the villages. To make things even more complicated, in Burgundy they have a mosaic-like set up where each estate owns certain  “parts” of a number of vineyards. Therefore you “cannot” see what you own.

The vineyard plots that rarely come up for sale are expensive and many estates cannot buy them alone and are looking for investors.

To give you an idea of costs, here is the official price index in 2013

Chardonnay – Côtes de Beaune

Appellation village – 590.000€ average price/hectare

Appellation 1er Cru – 1.55m€ average price/hectare (up from 1.50m€

Appellation Grand Cru > 2.46m€/hectare to 12m€

Pinot Noir – Cotes de Nuits

Appellation village  – 480.000€ average price/hectare

Appellation 1er Cru – 655.000€ average price/hectare from 620.000€

Appellation Grand Cru > 2.46m€/hectare to 12m€

Chablis : 175.000 €/ha, Chablis 1er cru : 300.000 €/ha ; Bourgogne appellation régionale : 48.000 €/ha ; petit Chablis : 76.000 €/ha.

Elsewhere in France:

Rhone valley – 1.2m€ / hectare

Bordeaux – 2.3m€ / hectare

Champagne – 1.1m€ / hectare

In Burgundy, which is primarily an agricultural region, vineyard transactions make up about 3% of the area of the agricultural real estate market but over 33% of the value, according to a recent publication.

To add to this, Burgundy has 38 of the 50 most expensive wines in the world…

Still interested? Well there are still some great “value-for-money” purchases to be made in Burgundy. When you’re established in the area, like we are, you get to hear of these things. If you want to know more, contact us: stephenliney@gmail.com

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