One needs to look beyond the romanticism of a wine farm, as it is extremely specialised in nature when it comes to placing a market value on such. As experienced wine farm Valuers, we consider the property and all its components such as homestead, ancillary buildings, vineyards and land when undertaking Wine Farm Valuations.
Farm Valuations are complex and there are many factors which need to be taken into account. Wine Farm Valuations, or the valuation of vineyards is no different and one cannot simply apply a comparable sales rate per hectare to the extent of the farm to calculate the value of such. It is necessary for a well-informed Wine Farm Valuer with experience in the agricultural industry to undertake such exercise, as such understanding is imperative over and above the knowledge of residential, commercial and industrial valuations, which the wine farm may include additional elements of.
Without going into much detail, these are a few of the factors which need to be taken into account, when performing a wine farm valuation:
- Are the cultivars planted, suitable to the area and climate?
- Are the soil types suited towards the cultivars?
- Are the vines grafted onto the correct rootstock?
- Are the respective cultivars facing the most appropriate aspect and are they planted at the best altitude, as climatic conditions will have a large impact on such, thereby affecting the quality of the grapes?
- Is an appropriate trellis system utilised for the cultivar?
- Is there sufficient water available or are the vineyards under irrigation (legally)?
- What is the age of the vines, as vines have a lifespan which will affect the yield of such?
- Are pests and diseases under control?
- What improvements and implements does the farm include?
All these factors are taken into account when utilising the comparable sales method of valuation, where the selling prices of similar farms in the same area are utilised to determine a market value, after certain adjustments are made in order to make the comparable sales as similar as possible to that of the wine farm being valued.
Do you, or the wine farm valuers you are utilising, have the experience to answer such questions, in order to determine an accurate market value? Equip yourself with a wine farm valuation report which will enable you to make an informed decision.
Ricardo Gouveia, Director of Valuetec, in addition to having a sound knowledge of wine and vineyards, has completed a Wine Diploma at the Cape Wine Academy with the intention of becoming a Cape Wine Master in the near future. He therefore oversees all the wine farm valuations undertaken by Valuetec.