Monday, August 03, 2009
Dear Reader,
Few places in the world are suitable for quality wine production. The climate and soil need to be right, and vine cultivation and wine production expertise need to be available locally. You also need production and marketing infrastructure. No surprise, then, that to own an acre of vineyard in California’s Napa Valley could set you back $180,000. In the Loire Valley in France, you could pay $200,000.
What might surprise you is that owning your own vineyard is within your reach…plus, this vineyard could earn you a healthy income.
If you have ever dreamed of owning your own vineyard, you need to take a serious look at Mendoza, Argentina’s most famous wine-producing region.
Mendoza sits at the foot of the Andes, 600 miles west of Buenos Aires. Soil and climate are perfect here for wine production. Argentina’s wine industry started nearly 500 years ago. First developed by the Spanish, the French and Italians followed a couple of hundred years later. They came with cuttings and expertise from their home regions. Italians brought Bonarda. The French came from the Bordeaux region and brought Malbec (for which the Mendoza region has become famous).
Today, there is a third wave of pioneers setting their sights on Mendoza. They are coming from all over the world. The reasons are simple: U.S. dollars buy 15 to 20 times more vineyard here than in Napa Valley. Global demand for wine and Mendoza’s Malbecs is going through the roof. Over the next four years, demand from Russia and China is expected to grow by 24.4% and 36.6%, respectively. Consumption in the U.S. is growing, and is expected to leapfrog France and Italy at the top of the league table by 2012.
Big-label vineyards are coming…joining the small local and gringo wineries. With the bigger wineries comes wine tourism. Boutique hotels are opening up to cater to these high-end tourists. This is good news for Mendoza—or, “the next Napa,” as it is being called.
The good news for you is that the real estate values here are still amazing. In fact, $5,000 will buy you an acre of raw vineyard with irrigation rights in Mendoza. For extremely high quality vines you’d pay up to $23,000 an acre. And it’s usual for small vineyards to come with a house on the property—perfect for surveying your domain. Some vineyards even come with working winemaking equipment.
Take, for example, an income-producing property 20 miles from the San Rafael airport. This property has more than 300 feet of river frontage, and includes 6.1 acres of mature Malbec vines and 6 acres of Cabernet vines planted eight years ago. It also has 3.7 acres of d’Agen plums. The caretaker’s house has been recently renovated. Irrigation rights are in place for all vines planted. Additional water supply is available from a well shared with a neighboring property. Production here in 2007 was 52,000 kilograms of Cabernet and Malbec grapes…and 1,900 kilograms of d’Agen plums were harvested. The asking price is $160,000.
Ronan McMahon
Posted Under:
appreciation potential, argentina
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