Yealands Plans Growth as Marlborough Land Prices Recover

Yealands Wine Group plans to expand its land holdings in New Zealand’s Marlborough region as competition for wine-growing property drives up prices, founder Peter Yealands said.

New Zealand’s biggest producer of pinot gris owns 1,500 hectares (3,705 acres) of vineyards and Yealands said he would double the company’s acreage if he could. Apart from Marlborough’s signature sauvignon blanc varietal, Yealands makes wines from grapes such as chardonnay and pinot noir under the Yealands Estate and Peter Yealands brands.

“The prices are creeping up quite nicely,” Yealands said in an interview in London during a March visit to Europe. Land values “relate to the return you can get from your harvest.”

Yealands Estate Winemakers Reserve Gibbston Pinot Noir is priced on the Yealands website at NZ$227.70 per six-bottle case while the same quantity of its Yealands Estate Single Block Selection Sauvignon Blanc sells for NZ$135.

“Our plans are to grow more pinot noir in Marlborough,” Yealands said. “Marlborough is now getting recognition as having equal if not better quality than Central Otago,” New Zealand’s main region for the grape. “We have a large hectarage and we’d love to put more in. Pinot noir is more site-specific than sauvignon blanc, and there’s not that many sites left.”

Land values in Marlborough are recovering after the financial crisis caused prices to tumble. Top-quality vineyard land in the region rose as high as NZ$250,000 (US$190,000) a hectare and fell to about NZ$175,000 before beginning to climb again, according to Yealands. Cheaper land lost half of its value, with prime grape-growing property on the flat now costing around NZ$150,000 and another NZ$40,000 to NZ$50,000 to develop.

Pinot Noir

There are probably 24,000 to 25,000 hectares planted in Marlborough out of a total suitable landmass of about 30,000 hectares, Yealands said. That leaves “5,000 or 6,000 hectares that are being snapped up fast. People are landbanking it to position themselves for future growth.”

Vineyard expansion in the region has been partly held back by a shortage of nursery plants, as well as the challenge of finding financing.

Exports to countries such as China and the U.K. have been brisk, Yealands said. “There’s new demand coming in all the time. Each year we’re adding another 10 to 15 countries. There’s definite growth right across the board.”