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The Bordeaux and Entre-Deux-Mers-based business, which has a dedicated China desk, is an affiliate of Christie’s International Real Estate. It has helped broker high-profile transactions such as Hong Kong company Profitsun’s 2017 purchase of Château Fauchey, a 15th-century Bordeaux estate; Château du Mylord, bought in 2013 by Hong Kong’s Edwin Cheung; and in March this year, Château de Cadillac-en-Fronsada, to a Chinese buyer named Chen, an Asian technology, media and telecom (TMT) investor.

Michael Baynes, Vineyards-Bordeaux co-founder, says a Chinese investor’s purchase of Château de Viaud in Lalande-de-Pomerol almost a decade ago was “the turning point of the Bordeaux vineyard market”.

“It came at a time when vineyard prices per hectare had been plummeting – partly as a result of the powerful New World wines with their competitive pricing, approachable taste and outstanding marketing practices,” he says.

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The Chinese arrival happened to coincide with the Bordeaux 2009 vintage being highly acclaimed by international wine media.

According to government statistics, about 25 to 35 chateaux vineyards change hands each year and Vineyards-Bordeaux says it typically handles about 30 to 40 per cent of these, ranging in price from about €1 million (HK$8.7 million) up to tens of millions.

Baynes estimates that since 2010 his team has been involved in about 15 transactions to mainland Chinese or Hong Kong-based investors. He has observed that they fall into three investor types: “those already in the alcohol or hospitality business seeking to control their product supply; those who recognise that China represents a vast new market for wine demand; and finally, those that love wine and its lifestyle and wish to diversify into Euro-backed assets”.

Currently, Baynes says, demand from Asia “continues to be a consistent buy-side feature”, although there is less speculation in the market. He sees mainland Chinese and Hong Kong investors as “now behaving much the same as other investor groups from other countries: more stable and, in the last few months, starting to appear on the sell side as well as the buy side”.

“Bordeaux has been making wine for more than 2,000 years,” Baynes says. “The region has welcomed investors and wine lovers for many centuries, and I am sure it will continue for many centuries to come. I have no doubt that China will have a major part to play in its future.”

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Yet, as a new report from Savills reveals, growing grapes in Europe is no longer restricted to the Mediterranean. The sector is “one of the fastest growing areas of the UK economy, and an opportunity for landowners to diversify”.

 According to the report, viticulture can begin as a small project, needing only around three hectares potentially to turn a profit. “This small commitment could appeal to those with smaller holdings, or those who want a new enterprise without adversely affecting existing rotations,” the report states.

Yields of grapes can of course vary a great deal from year to year. For example, poor years occurred in 2008 and 2012 through bad weather and low light levels. However, the extreme heat of 2018, described as “the worst summer for decades” by arable farmers, brought near-perfect conditions for English winemakers. The high quantity of quality grapes harvested that season produced 15.6 million bottles of wine.

Almost all the area under vines in England is dedicated to high-quality grape varieties, and that area “is growing fast”, having tripled since 2000 to meet rising demand for UK wine.

 However, while consumption is increasing, Chinese investors have not developed a taste for buying British vineyards – at least, thus far. Chris Spofforth, director, Savills Viticulture, finds that somewhat surprising.

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“Wholesale investment in UK vineyards from China has been relatively muted given the increasing overseas popularity and demand for UK wine, particularly sparkling, in the Far East,” he says. “There are some Chinese invested in other businesses where ownership of a UK vineyard could be considered complementary, and there is some movement from that direction.

“Let’s not forget that this industry, while burgeoning, is in its infancy compared to, say, France,” Spofforth continues. “The level of overseas interest in the sector generally is highly promising, and we have no doubt it will attract more focused attention from Chinese investors sooner rather than later.”

Meanwhile, Chinese interest in another international wine region – California’s Napa Valley – appears to be waning.

“From what I understand, Chinese buyers are not currently looking at wineries as much as they were last year,” said Mike Bertolucci, of Gates Estates Sotheby’s International Realty.

 He adds that rather than seeking to buy a working winery, buyers are more interested in a home that has a small private vineyard where they can grow the grapes and outsource everything else. This option, known as custom crush, avoids the expense and regulatory requirements of full-scale production, while owners can still get a private-label cellar at the end.

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It is a different story in Australia, where it has been estimated that up to 10 per cent of wineries in South Australia’s iconic Barossa Valley are now in Chinese hands.

Stephen Strachan, director of Langley and Co, a company dealing in wine industry acquisitions, says that, earlier this year, six out of seven transactions he handled involved Chinese parties.

“It has been a bit quieter these last few months, but that could be for any number of reasons,” he says.

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Chinese buyers are “still active”, and while five years ago the Barossa Valley would have been their first port of call, “now we are starting to see genuine interest in a number of regions”.

In South Australia, this includes the McLaren Vale, Clare Valley and Riverland regions, but also the Yarra Valley and Mornington Peninsula in Victoria, and Western Australia’s Margaret River.

“It’s quite widespread,” Strachan says. “And their involvement in the Australian wine industry is quite integrated now – lots of Chinese businesses have been here for a while.”

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