LVMH and Graff have one each, Chinese luxury jewellery group Tesiro recently invested, and Chanel’s co-owners just bought their third. Here, Kirsten Hill investigates this rising trend and why South Africa is a hotspot.
Set on a hill above the historic village of Franschhoek, in the Western Cape wine-growing region of South Africa, Mont Rochelle is a luxurious hotel and winery with sweeping views of the surrounding vineyards and mountains. Fruit and wine have been cultivated here since the 18th century when French Huguenots (many of them winemakers) fled to the Cape to escape religious persecution in France.
This remarkable property was acquired by Virgin Limited Edition, Richard Branson’s collection of unique retreats and luxury hotels, in 2014 in a deal facilitated by specialist luxury real estate firm, Acquire Africa. The property has since undergone a complete makeover. With 39 hectares of grounds, 22 stylish rooms, two restaurants and a glorious spa, it has everything you’d want from a top-class hotel – with the farm itself boasting numerous accolades from the hospitality and wine industries.
“ These world-class destinations are also becoming increasingly sought after with overseas investors & global brands ”
Whilst wine farms such as Mont Rochelle carry their own unique and rare appeal, South African wine farms are both numerous and abundant in both beauty and history. These world-class destinations are also becoming increasingly sought after with overseas investors and global brands. When taking a closer look at their offerings, it becomes easy to see why.
“There’s undoubtedly the aspect of lifestyle – breathtaking scenery, temperate climate, a burgeoning gourmet and wine culture, rich history and award-winning vineyards but, as an investor, also the exciting prospect of building a wine brand in an environment that is finally being recognised globally for its quality,” says Tara Whiting of Acquire Africa.
Liberated by the advent of democracy, the South African wine industry has indeed gone from strength to strength, with exports having more than doubled between 2005 and 2015. South Africa is now an undisputed first division wine producing country and it ranks 7th as one of the biggest wine-producing counties in the world, producing approximately 4.2% of the world’s wine.
“ South African wine-growing regions have developed an elite class of vineyards ”
In the 2015 International Wine and Spirit Awards alone, South Africa’s Jordan Winery scooped the Chardonnay for its Nine Yards Chardonnay 2015. Other top locals, Paul Cluver and Kanonkop, won the Riesling and Pinotage Trophies respectively, whilst Klein Constantia’s Vin De Constance (known to have been Napoleon’s favourite dessert wine) has been voted No. 10 of Best 100 Wines in the World by the Wine Spectator.
“Years of hard work, investment and diligence have yielded a number of superstar South African wineries, producing world class wines that deliver some of the finest value in the world! This explosion of high-quality wine has been partially led by a growing number of younger, dynamic winemakers who have worked more than one vintage abroad and returned home with their important know-how and are producing amazing new world wines, ” comments Tara.
“Foreign investor interest in SA wine farms is now understandably strong – and it’s continuing to grow, remaining the strongest in wine-growing areas such as Stellenbosch, Franschhoek and Constantia,” she says. “These areas represent the most established and globally recognised brands. They are also renowned for their heritage features, enviable quality of life and close proximity to the cosmopolitan city of Cape Town,” she comments.
Branson’s Mont Rochelle Estate
“Much like the prestigious regions such as Napa and Bordeaux, these South African wine-growing regions have developed an elite class of vineyards that have emerged as leaders and ambassadors for the country’s winemaking potential,” explains Tara.
“Similarly, South Africa’s more remote wine-growing regions, such as the Swartland, Elgin and the Cedarberg wilderness area, are also fast gaining global recognition for their innovative and award-winning artisanal and boutique wines,” Tara explains.
“It’s an exciting time for SA’s wine industry and, quite frankly, an optimal time for investors,” she states. “The recent devaluation of our currency makes wine farm acquisition particularly financially attractive to foreigners, but there’s far more than that too.” she continues. “One of South Africa’s fastest growing tourism categories is Food and Wine Tourism, with the growth in the wine industry set to double in the next ten years,” she says, “South Africa, and the Cape region in particular, is being recognised as one of the foods and wine capitals of the world – complete with unsurpassed beauty and heritage.”
“ SA’s wine and hospitality industry is attracting the attention of many high-profile foreign investors ”
SA’s wine and hospitality industry is attracting the attention of many high-profile foreign investors. Amongst these are American Charles Banks, (former owner of California’s ‘cult’ wine brand Screaming Eagle, and founder and managing partner of Terroir Capital – which manages about $200 million of assets in hospitality and wine) who purchased Mulderbosch, and Indian billionaire Analjit Singh, who has bought three adjoining Franschhoek farms as well as a substantial stake in Mullineux Family Wines.
Prominent Bordelais who have purchased wine farms in South Africa include the Countess May-Eliane de Lencquesaing of Ch Pichon Lalande (Glenelly), Pierre Lurton (Morgenster), Paul Pontallier of Ch Margaux (Plaisir de Merle) Alain Moueix of Ch Fonroque (Ingwe) and Michel Rolland of just about everywhere (Bonne Nouvelle) …the list continues. In many cases, new foreign owners, as with the country’s historic Klein Constantia winery, have inject a renewed sense of energy and commitment into these estates – continuing to build up the brands and taking steps to retain and restore their historic features and build on their on their tourism aspects.
Excitingly, the wine tourism industry is still in its infancy in South Africa in comparison to other more developed markets. However, the Western Cape is increasingly sophisticated and ingenious in their marketing approaches. For many estates, the concept of wine tourism began with their tasting rooms and restaurants. Since wine and food are natural partners, this makes obvious sense. However, it hasn’t stopped there.
“ SA’s smaller boutique or ‘lifestyle’ wine farms start at around the €1.2 – €1.7 million mark, and can surge up to €17.5 million ”
Many SA wine estates have now realised the value in the exploding wine tourism industry and have extended their offerings to include everything from museums, to art galleries, to spas and mountain biking and hiking trails. “South African wine farms are now focusing on the marketing the ‘experience’ and not just the product,” Tara says. “Added to this, the offering our wine farms are putting on the table from a wine point of view is, quite simply, world-class!”
In general, prices for SA’s smaller boutique or ‘lifestyle’ wine farms (approx. 10 hectares) start at around the R20 – R30million (€1.2 – €1.7million) mark, whilst top-end wine brands can sell for between R100 to R200 million (€5.85 – €11.7 million), and as much as R300 million (€17.5 million) depending on the brand and area.
Most high-end South African wine farms are marketed on an exclusive and confidential basis and not advertised to the public. In these cases, a specialist luxury real estate agency such as Acquire Africa is successfully able to connect potential buyers and sellers through an established network of international business and personal contacts, developed through owner Tara’s experiences of living and working in international cities such as Hong Kong, London and New York.