Anson: Bordeaux vineyard prices 2018 – All that they seem?

Jane Anson looks in further detail at the recently released Bordeaux vineyard prices for 2018...

The French land agency SAFER released its annual look at vineyard prices across France a few weeks ago.

Over here in Bordeaux, it’s a fairly rosy picture for existing owners, less so for those looking to pick up an estate. Bordeaux prices have risen 7% overall from 2017 to 2018.

In contrast, Bergerac, right next door and still in the Aquitaine region, has lost 11%, coming in now at an average of €8,000 per hectare, just over half the least expensive appellation in Bordeaux and bringing the overall Aquitaine figure to a 3.1% rise.

‘Translating what these figures actually mean is a little more complicated.’

The two Bordeaux appellations that have risen the most from 2017 to 2018 are St-Estèphe (up 22% to an average of €550,000/ha) and Pomerol (up 20% to an average of €1.8million/ha).

Other rises are seen with Pessac-Léognan (up 11% to €500,000/ha) while right next door AOC Graves rise is 7% to an average of €32,000/ha, and Blaye Côtes de Bordeaux (up 11% to a rather more modest €20,000/ha). Lalande de Pomerol up 14% to €240,000/ha average and St-Emilion up 8% to €270,000/ha –  though highly misleading in fact, and reflective of the vast difference in soils and prices in an appellation where the most sought after sectors easily head upwards of €3 million/ha – and the St Emilion Satellites were up 6% to €95,000/ha.

In the Médoc, Pauillac is up 10%, the only appellation to break the €2 million barrier, now at €2.2million/ha on the SAFER figures. Until 2018 St-Julien and Margaux were recorded together but are now given separately – with Margaux at €1.1million/ha average and St Julien at €1.3million/ha average.

Sauternes this year has remained unchanged at €30,000/ha on average.

The only two appellations to see drops in average prices are Listrac, down 7% to €70,000/ha, and the sweet AOCs of the Right Bank such as St-Croix-du-Mont and Loupiac that are also down 7% to €14,000.

A closer look

Translating what these figures actually mean is a little more complicated. SAFER doesn’t tell us, for example, how many transactions there have there been in each appellation, so the percentage rises may simply be the result of one or two transactions from a low base the year before. This is almost certainly the case for AOC Graves de Vayres, that was up 6% in 2018 to €16,000/ha. On closer examination that is a rise of just €1,000/ha.

Similarly, although Blaye Côtes de Bordeaux shows a rise of 11%, all of other Côtes de Bordeaux have remained at the same price as 2017, suggesting that Blaye’s rise is the result of a few transactions rather than a sustained trend.

Other transactions will not be recorded by SAFER at all – it is highly unlikely, for example, that Petrus’ 2018 sale of 20% of its stock to a Colombian-American businessman was included in the annual assessment, as that was a sale of minority stock holdings rather than land.

‘Overall it has not been a year of significant transactions, with more activity from French buyers rather than international ones,’ Alex Hall of Vineyard Intelligence tells me as we sit down to discuss the figures.

‘Of all the appellations that we see here, I would say St-Estèphe is the most reflective of a true trend, as it continues its rise to catch up with the other communals of the Médoc. There have been a good number of transactions in the appellation that give the figures credibility, and I can see St-Estèphe continue to increase in price per hectare over the next few years’.

It easy to see what he means here when you look at completed sales – over 20% of St-Estèphe has changed hands over the past decade. In 2018, among the most high profile, were the sales of both Château Clauzet and Tour de Pez to Jacky Lorenzetti for the expansion of Lilian Ladouys, and of Château Domeyne to Vincent and Natacha Ginestet.

Another clear trend is consolidation – with current owners looking to expand their existing holdings. Just this week it was announced that Château Trianon in St-Emilion has bought and then merged the 4.5ha of neighbouring Château Lamour into its own vineyard, bringing its surface area to 14.5ha. This is part of a long-term trend seen across Bordeaux – in the Graves region, for example, in 1993 there were 415 winemakers in the appellation against 205 today, while in Listrac there were 75 independent winemakers in 2010, while today the number has dropped to 53. You see the average estate size grow over the same time period in both appellations, a clear indication of consolidation.

‘The big story really,’ says Hall, ‘is the continued polarisation between the big and small appellations, with the price between them getting ever wider. Bordeaux is still a relatively hard sell outside of the big-name regions, and there is a lot of supply and not always enough demand in these areas. The overall picture is probably not as rosy as the spikes in the figures suggest, while competition for the big names is getting ever more fierce’.