Vineyard Prices Surge 21% in Pauillac, Home of Lafite Rothschild

Vineyard prices in Pauillac, the Bordeaux wine region home to Chateau Latour and Lafite Rothschild, jumped 21 percent last year, pushing the cost of a plot of vines the size of a rugby field to $2.6 million.

Pauillac wine property changed owner for 1.2 million euros ($1.6 million) to 2.5 million euros a hectare (2.47 acres) in 2012, France’s Agriculture Ministry wrote in an online report today. Average prices rose to 2 million euros from 1.65 million euros in 2011.

The price of wine real estate in Pauillac jumped sixfold in 10 years, and in France only some grand cru properties in Burgundy carry higher prices at 3.8 million euros a hectare, according to the Paris-based ministry. In the Champagne region, buying vines in the most expensive Cote de Blancs appellation costs 1.5 million euros a hectare, it said.

“Five appellations, Pomerol, Margaux, Saint-Estephe, Saint-Julien and Pauillac, positioned on high-end markets and export oriented, don’t seem to have experienced the crisis of wine property,” the ministry wrote, referring to Bordeaux appellations known in French as the “five sisters.”

A case of 2006 wine from Chateau Latour sold for 4,200 pounds ($6,500) on the Liv-ex market in London this week, the highest in seven months.

Buying all wine real estate in the Aquitaine region that includes Bordeaux would cost 11 billion euros at 2012 prices, according to the report.

Saint-Emilion

The seven Bordeaux wine-growing areas where real estate costs more than 200,000 euros a hectare, including the “five sisters” as well as Saint-Emilion and Pessac-Leognan, account for 1/10 of the region’s vineyards and almost three-quarters of its value, the report showed. That compared with less than half of the value in 2000 and a third in 1991.

Property prices in Margaux and Saint-Julien tripled in a decade, while doubling in Saint-Estephe and Pessac-Leognan and rising 50 percent in Pomerol, according to the report.

In Pomerol, which contains Chateau Petrus, average vineyard prices were unchanged at 900,000 euros a hectare, with transactions valuing wine property between 550,000 euros and 2.35 million euros a hectare last year, the report showed.

Prices in the Saint-Julien and Margaux appellations fell 9 percent to 1 million euros a hectare, the ministry said. In Pessac-Leognan, vineyard costs jumped 21 percent to an average 470,000 euros a hectare.

82,000 Euros

Average prices for wine real estate in Aquitaine climbed 3.3 percent in 2012 to 82,000 euros a hectare, driven by gains for more expensive properties, according to the report.

“The real-estate price development is only due to the rise for high-end vineyards,” the ministry said. “Transaction prices for the remainder of the vineyards, after 10 very difficult years, are stabilizing, or continue to fall for a small number of appellations.”

One hectare in Pauillac would buy two hectares of vines in Margaux, 10 in Saint-Emilion or 40 in Sauternes, according to the ministry. Twenty years ago, wine property in Pauillac was 10 percent to 30 percent more expensive than in the other three areas, it said.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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