Vineyards in France Serve Chinese Investors Seeking to Diversify Property Portfolios

Vineyards in France Serve Chinese Investors Seeking to Diversify Property Portfolios

Viticulture is a thriving business in spite of the challenges brought about by the climate changes going on along with global economic uncertainty. Investors based in China and Hong Kong seems to find vineyards in France as attractive investment opportunities in order to diversify their property portfolios.

Declining interests from Chinese investors has been observed in other international wine regions such as California’s Napa Valley.

An investment opportunity for landowners has risen with restrictions being lifted in Europe with regards to growing grapes.  As a result UK’s economy is rapidly booming in areas of pertaining to vine estate.

Despite increased consumption and rising demand for UK wine, Chinese investors are still not convinced enough to invest in British vineyards.

Investors with low capital can start viticulture as a small business as around only three hectares can yield to be a profitable investment. It is projected to draw Chinese investors soon.

Buyers are seemingly enthusiastic in a home that has a small private vineyard where they can grow grapes and outsource everything else. This option known as custom crush avoids the expense and regulatory requirements of full-scale production, while owners can still get a private-label cellar at the end.

Chinese investors entered the market almost a decade ago when vineyards prices per hectares were in a free fall. Back then Bordeaux 2009 vintage had become a huge hit in the international wine media which turned out to be Bordeaux vineyard market’s turning point.

Since 2010, about 175 Bordeaux wine estates have been purchased by Chinese investors, putting vineyards of France in a spotlight. China is projected to play a vital role in its future.

Three categories have been made for the Chinese and Hong Kong investors, wine lovers who are willing to invest in a lifestyle that is a Euro-backed asset, those who have seen potential in for wine in the Chinese market and finally those who are already involved in the alcohol and hospitality business and wish to control their product supply.

Recently, a changing pattern seems to have been emerged within the Asian investors. Who were previously only investing to buy vineyards, are now adopting the sell-side feature, acting similar to the investor groups from other countries.

Chinese investors also have a strong foothold of wineries in South Australia’s iconic Barossa Valley, which seems to be becoming more comprehensive.