Invest in a Wineyard
From dream to reality
Are you dreaming of a beautiful building in the middle of its vineyards, of savouring the
wine from your property, of living your passion, and at the same time looking for an
enjoyable means of exempting your assets from taxes...? Acquiring a wine estate is probably
one of the most seductive solutions... provided you are careful and get expert professional
advice.
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More and more forty and fifty-year-olds
aspire to a life combining the comfort
of a beautiful house with the pastoral
charm of a sunny vineyard, the coolness
of a cellar where wine is tasted
in a monk-like silence. The magic of
grape growing, associated with oenology,
seduces many of those entrepreneurial
but pragmatic spirits, who are
seeking new challenges.
Of course, when the wine is drawn, it
must be sold! And this is this commercial
challenge that attracts a growing
number of investors. With successful
experience in industry, in trading, or
even as surgeons or lawyers, these
businessmen jump into the wine growing
business with a brand new passion
and motivation. Oh added joy, this
pleasure investment also enables
them to less heavily taxed on the sale
of their previous business...
No experience? No worries!
Do you also dream of becoming a
gentlemen wine grower, but are you
afraid that your technical shortcomings
will handicap you? Relax. 50%
of people taking over such businesses
are beginners!
"One out of two entrepreneurs is a stranger to the world of wine", states
Michel Veyrier, director of Vignobles
Investissement in Montpellier and
founder of the Vinea Transaction network,
which includes 5 specialised
agencies in vineyard transactions.
“To come from a world other than that
of wine, is to bring open-mindedness,
and fresh new ideas. This wealth of
ideas is necessary to let this living
matter that is wine breathe" underlines
Guy Jacquemont, a wine professional
for over 35 years and manager
of the Vinea Transaction agency of
Bourgogne-Beaujolais.
The typical profile of the entrepreneur
is a 45 to 60-year-old man who wants
to remain active. Generally: a decision
maker with a good professional track
record and having a minimum of one
or two million euros as capital.
Generally, he is fluent in English – vital
for export – and an expert in management.
He will delegate the two technical
stages of wine, wine-growing and
wine-making, to specialists, and he will
look after commercialisation, management
and marketing.
First of all, the property is a place to live
Precious does a property combines
the essential life style advantages of
pleasure, nature and space, in the present,
with the guarantee, tomorrow, of
the asset value of your investment.
Whether your choice is a simple
farmhouse, a beautiful residence or a
castle, your property offers you first
and foremost a place to live. It must
welcome your family and meet the different
demands of everybody's tastes
and daily life. Do you want to have a
sea view? An isolated property?
Do you prefer being closer to a
town? Or to have a quick access to
the motorway or to an international
airport?
Your research will have to include all
these needs, and it will have to be
conducted pragmatically, with the
help of consultants who know the
region inside out along with your
selected appellation.
Professionals to walk you through
It is at the outset that the estate agency,
specialised in vineyards, intervenes.
Numerous agencies, which are more
or less generalists, claim a know-how,
but in reality only occasionally deal with
the sale of a wine-producing property.
According to Maurice Raveyre, of the
Raveyre firm in Port Fréjus, "others only
orientate the investment from the residential
aspect and completely miss out
the profitability and the business side".
To be sure to benefit from professional
advice, you must chose a well-known
agency, which has made dealing in
wine-producing properties its speciality.
The Vinea Transaction network,
unique in France, gathers the leading
agencies of this very specific sector,
each specialised in the wine-producing
region in which it is located.
Languedoc-Roussillon, Vallée du Rhône,
Provence, Bourgogne, Beaujolais, Val
de Loire and Bordelais. In 20 years,
these agencies have completed hundreds
of property transactions, representing
an investment of over one billion euros.
They have on their books almost the
entirety of all wine-producing properties
for sale in France. In the first instance,
a consultant will meet with you so that
you can present your project and be
oriented towards the properties best
suited to your self-defined criteria and
budget.
The type of soil, the type of wine, the wine cellar...
You may have all the information available
to decide on a place to live, but it
is completely different when it comes
to the technical aspect of your investment.
Here again, expert advice from
a specialised agency will be vital and
will enable you to ask the right questions:
Are the type of vines planted
adapted to the type of soil? Do some
plots have to be replaced? Must an
irrigation system be set up? In the
wine cellar, is the equipment up to
scratch or is some investment required
before the next harvest? The stocks
must also be tasted and valued. All
these questions, and many others,
must be asked before taking any decision,
and it is your agency which will provide
you with the means to understand the
sometimes complex ins and outs of a
wine-producing property transaction.
To that effect, the Vinea Transaction
network has produced for the customers
of its agencies, a list of the ten
key points on the essential stages of a
transaction
Do you also dream of becoming a gentlemen
wine grower, but are you afraid that
your technical shortcomings will handicap you?
Relax. 50% of people taking over such businesses
are beginners!
The "key in the hand": the guarantee of a controlled budget
After numerous visits, when you have
finally found the ideal living place, not
all the advantages might have been
gathered at the time of buying. If the
location and the quality of the soil are
perfect, the building might need some
refurbishing… Your agency will direct
you towards specialised architects
who know how to transform an old
farmhouse or an 18th century castle
into a quality living space for the third
millennium wine-producer. They will also
know how to refurbish the wine storehouse,
how to integrate new regulation
standards and how to adapt the site to
the most modern wine-making and
growing technologies.
The approach of the Vinea Transaction
network is unique. "We offer our customers
a "tailor-made" refurbishment
service with detailed quotes. This
enables the buyer to budget for and
plan the investment. This pragmatic
and professional approach ensures
the buyer the consolidation of the
investment and a security on the value
of the asset", explains Michel Veyrier.
A long term investment
"Bricks and mortar remains one of the
best financial investments over the
last 20 to 30 years", analyses Henri
Duval, of Vinea-Loire. "This can be
seen despite the current wine-producing
crisis. More reliable than the
stock exchange, of better long-term
stability than a business, the investment
in a wine-producing property
really is an investment for the future. There are few investors who have
seen their wine-producing assets lose
value."
Depending on the legal structures, a
wine-producing property presents definite
tax advantages. An appropriate
organisation enables tax advantages
(wealth tax, deduction of expenses,
specific financial amortization, absence
of professional tax, limited land tax...)
and legal (transmission for a consideration
or free with reduced costs, for
instance). Here again your agency will
direct you towards financial and legal
consultants, to study with you the solutions
best suited to your situation and
projects.
Budget: from 1 to 3 million euros
Which region to invest in and with
what budget? Although vineyard prices
have stagnated in most regions in
France over the last few years, the
housing prices have increased throughout
the country. The small units with
beautiful buildings remain the most
sought after, because it is easier, in a
still uncertain wine market, to sell
50,000 bottles a year rather than
500,000! The value of the properties
therefore remains stable for small
units with beautiful buildings, whereas
properties larger than 70 hectares
without attractive housing have problems
finding buyers. To buy a wineproducing
property, you must expect
to spend from 1 to 3 million euros
(this range representing 80% of transactions)
and up to 5 to 7 million euros
in Provence or in the large developments
in the Bordeaux region.
Of course, these prices exclude the
most sought after appellations or properties
with exceptional buildings. If
you are looking for a prestigious appellation,
you must invest more than 2
million euros per hectare for a
Bordeaux or Burgundy Grand Cru...
The 10 key points to the transaction
The vineyard transaction is not simply limited to basic viewing and an agreement on the price. 20 years of negotiating vineyard transactions
has enabled the agencies of the Vinea Transaction network to define a methodology for ensuring the success of any sale or purchase project.
Here is a summary of these 10 key points, which prove that the technicality of the transaction is such that using a specialised agent as
intermediary is a must these days.
- The vineyard: : An up-to-date planting map and certificate, GPS control of the planted areas, health check of the vines.
- The environment: Natural and technological risks (frost, hail, flooding, drafts...) urban developments and large works
(TGV, motorway and dump site projects...)
- The buildings: asbestos, lead, Carrez law, water quality, parasitic state, energetic diagnostic prior to exploitation, conformity
to building regulations.
- The wine cellar:: conformity of installations, nature of the wine cellars (treatment of effluents, chloroanisoles...)
- The equipment:list and condition of the equipment, securities, leasing...
- The agrarian property and the brand: valuation of the stock and checking up on sufficient protection of the brand names
- Reserves and advances for cultivation: joint survey and analyses of reserves, assessment of cultivation expenses for the harvest
to come.
- The staff: experience, qualification and salaries of the employees, current disputes
- Tenancy rights and cooperative shares: checking up on the legal links between the property and potential partners
(farmer, cooperative,…)
- Capital gains and taxation: a burning issue generally dealt with by the notaries and the accountants of both parties.
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