The valuation of wine farms
Farm valuations are complex and there are many factors which need to be taken into account. The valuation of wine farms or 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 property Valuator with experience in the agricultural industry to undertake such an exercise, as such understanding is imperative over and above the knowledge of residential, commercial and industrial valuations, as the wine farm may include additional elements which may need to be accounted for.
Without going into much detail, these are a few of the factors which need to be taken into account, when performing a valuation of a wine farm:
- Are the cultivars planted and 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?
Do you or the valuation company you are utilising have the experience to answer such questions, in order to determine an accurate market value? Equip yourself with a valuation report which enable you to make an informed decision.
Author Gary Terblache, Agrisell