Secure supply contract enhances vineyard auction offering

In 2009, the Marlborough wine vintage accounted for 68 percent of the total tonnage achieved across New Zealand further solidifying the region’s accepted importance in this country’s wine economy.

Sauvignon Blanc remains the darling of Marlborough wine varieties - despite the valiant and inspiring efforts of other grape types – and an opportunity to either enter or consolidate a position within the Marlborough Sauvignon Blanc wine arena has arisen with the news that Fairhall Vineyard at 111 Ben Morven Road, Fairhall is to be auctioned on 14 August.

John Hoare and Jackie Herkt of Bayleys Marlborough are marketing Fairhall Vineyard which is owned by David Dew, founder of the successful River Farm Wines label in Marlborough. A local lawyer, David has been actively involved in the wine industry in various ways for close on three decades and is now living the Marlborough wine dream by having his own label.

“Fairhall Vineyard is one of five David owns in the region and his unwavering goal of producing boutique, single vineyard wines - with the associated detail and desire for quality - is evident in the way Fairhall Vineyard has been set up and maintained,” says Mr Hoare.

“Furthermore, the current independent management and maintenance contract for the vineyard - by well-known and respected Marlborough vineyard consultant, Les Masters - could form part of the negotiated conditions of sale with a potential buyer, thus ensuring continuity of production and supervision.”

With a vineyard canopy of eight hectares, Fairhall Vineyard has a target yield of 12 tonnes per hectare which is fair and in line with Marlborough’s average 2008 Sauvignon Blanc yields of 11.5 tonnes per hectare.

“Should a prospective buyer wish to have some income security in the medium-term, a five year grape supply contract is in place with River Farm Wines - if required - at an agreed price per tonne of $2000 (plus GST). Naturally, there are quality and other conditions to be met as part of this contractual arrangement but with talk of an expected oversupply of Sauvignon Blanc grapes in coming years, a guaranteed supply contract is definitely a plus for any vineyard where the owner does not intend to make their own wine,” explains Mr Hoare.

This property represents an opportunity for a range of different buyers and hence, spirited bidding is expected at the auction next month.

“We’ve had interest from people looking to enter the industry for the first time who are encouraged by the offer of a secure grape supply contract for the next five years and this also makes the opportunity attractive for joint ownership or family trust investment. The property could also appeal to an existing grape grower or winery looking to boost their grape tonnage,” says Mr Hoare.

The vineyard boasts an excellent and reliable water supply with a full irrigation system servicing the property thanks to supply from Southern Valleys Irrigation, the private Korere water scheme and a bore.

Support buildings on the property include vineyard staff facilities comprising a communal area, shower and toilet amenities and kitchenette. Other roomy sheds and garaging provide additional vineyard equipment and machinery storage.

A comfortable, 3 bedroom 1970’s home – currently rented out on a month-to-month tenancy for $325.00 per week – is on the property and enjoys enviable wide views from its elevated position. As the property is located just minutes from the centre of Blenheim and the airport, Fairhall Vineyard is also ideally located to capitalise on the burgeoning tourism market in the Marlborough region.

“There is potential to capture some of the tourism dollars being pumped into Marlborough through developing accommodation options on the property,” says Mr Hoare, adding that the necessary compliance must be sought and gained through the usual Council channels.

“The existing modest dwelling could perhaps be extended to create a more substantial family home with the possibility of building separate visitor accommodation elsewhere on the property; or alternatively, the current home could become guest facilities and a family home could be sited away from this. Either way, the ambience offered by the vineyard setting makes this an appealing guest destination and with the established Marlborough Wine Trail nearby, this is an option worth exploring if an additional income strand is desired.”

Total gross annual income for the vineyard has been calculated at approximately $180,000 - less management and maintenance costs – showing a potential income of $100,000 before tax. Should the home on the property be continued as a rental income strand, an additional $17,000 gross could be added to the overall income.

Fairhall is just 1.5km from Blenheim’s city centre, and the property is handy to the Marlborough Golf Club and zoned for Fairhall Primary School and Marlborough Boys’ and Girls’ Colleges.