Wine growing land: Pic Saint Loup takes off, prices soar
The Pic Saint Loup has become the most fashionable appellation in the region. Over the last few years, the acquisition of estates by regional investors, outside the wine world, has multiplied. At the head of these neo-winegrowers, the real estate developers of Montpellier.
In 2008, the Guiraudon family (GGL group, a developer from Montpellier) put a foot in the vineyard, buying the Mortiès estate with partners. Then Bertrand Barascud, managing director of the Montpellier real estate group Amétis, bought Château La Roque. And last summer, it was Emmanuel Clausel who, following the sale of the Montpellier-based company Urbat Promotion to Vinci Immobilier, bought the Domaine de Valcyre in Valflaunès, a 120-hectare property of which 33 hectares are planted with vines.
High end receptive
The former developer has no shortage of projects or ambition to renovate and expand this property, renamed Uma. He is in the process of acquiring an additional 17 hectares of vines and plans to plant 20 hectares in four years. Aiming at excellence for the estate’s wines (with prices accordingly: from 14.50 to 35.50 euros a bottle), he has recruited Karen Turner, an Australian oenologist with a solid pedigree, and has already planned a reorganization of the winery.
He also intends to renovate the 3,400 m2 of buildings on the estate by creating a gourmet restaurant, a bistro, a school of taste, an art gallery and a spa with an indoor pool.
“I am primarily targeting the Montpellier clientele. The offer in high-end receptive is for the moment very limited in the Pic Saint Loup”, explains the entrepreneur who did not wish to reveal the amount of such investments.
Land prices have doubled in five years
“This attraction of investors for the Pic Saint Loup is a mark of recognition for this appellation,” says Michel Veyrier, founder and CEO of Vinéa Transaction, a specialist in the transaction of wine estates. It is a logic of capitalization that we observe in all prestigious wine regions. It’s a good thing for the region to finally have this layer of terroir with a strong reputation that creates added value.
As a result of this attractiveness, the price of wine-growing land is rising sharply. According to the SAFER, prices have almost doubled in five years: a hectare of vineyard was negotiated between 40,000 and 50,000 euros in 2017. Today, the median price is between 75,000 and 80,000 euros… Michel Veyrier even states that for the first time last year, a sale was made for a price per hectare exceeding 100,000 euros.
“The market for wine-growing land in Pic Saint Loup is very narrow, with about 1,300 hectares in production,” observes Christian Brun, director of the SAFER in the Hérault region. Sales of plots are rare. And when large estates are for sale, the prices are such that only investors with large amounts of money can take a position. It is the scarcity of supply and the proximity of Montpellier that are at the origin of this surge in the price of land, which is no longer in phase with an economic logic. The income generated has not increased in such proportions.”
This upward trend is not necessarily disadvantageous for existing winegrowers whose assets are increasing in value. But it is a serious obstacle for those who want to set up or expand. This is the price to pay to enter the big league.