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Bordeaux Futures? Tough Sell. Wineries? Big Deals Abound

Sylvie Cazes buys St.-Emilion's Château Chauvin, one of several recent winery purchases

Suzanne Mustacich
Posted: May 7, 2014

Sylvie Cazes has acquired St.-Emilion Grand Cru Classé Château Chauvin, owned by the Ondet family since 1891, for an undisclosed sum. Chauvin is a 37-acre estate in St.-Emilion's northwest near Pomerol. It has been under the management of two sisters, Marie-France and Béatrice Ondet, for the past two decades.

The Chauvin sale is one of several recent Bordeaux deals. Despite three tough-to-sell vintages, demand for Bordeaux properties has not declined. Investors, both French and international, continue to see the region's wineries as a valuable commodity.

With the acquisition of Chauvin, Cazes realizes her long-expressed desire to own an estate with her children. Cazes purchased the property with her three grown kids—Pierre, François and Julie Régimbeau. Julie will work with her at Chauvin after she completes her wine-focused MBA.

"[The Ondets have] done some very good work, the vineyard is in good shape and so is the cellar," Cazes told Wine Spectator. The former director of Château Pichon Longueville Comtesse de Lalande, Cazes brings with her Philippe Moureau, the former technical director at Pichon Lalande and Château Ormes de Pez, and Laure Canu, who is in charge of marketing. "I’ve been speaking to Philippe Moureau, and there are just some small things we need to do to improve the quality. It has great potential," said Cazes.

Recent releases of Chauvin have scored in the Very Good range (85-89 points on Wine Spectator's 100-point scale) and sell for between $28 and $45 at U.S. retail shops.

Cazes is co-owner with her family of Domaines Jean-Michel Cazes, which includes Lynch-Bages, Ormes de Pez and Domaines de Sénéchaux. She also manages the restaurant Chapon Fin and a luxury travel agency.

According to Hervé Olivier, director of SAFER, the French property and rural development agency, Bordeaux real-estate transactions are continuing at the same pace as 2013. Land prices are stable, with estates producing basic Bordeaux selling for as little as $20,500 per hectare (about 2.4 acres) while Pomerol vines are going for $1.3 million or more per hectare. Recent buys include:

* On the Left Bank, Domaines Fabre, run by Vincent Fabre, acquired Cru Bourgeois Château Bellevue de Tayac in Cissac-Médoc from Jean-Luc Thunevin for $5.5 million. Thunevin told Wine Spectator that he needed the money elsewhere—"It’s already spent," he said. The St.-Emilion-based vintner has a new $2 million warehouse as well as other projects.

Bellevue de Tayac includes 11 acres of predominately Merlot vines. "Thunevin had already done a lot of work 10 years ago when he bought it," said Domaines Fabre sales director Hervé Bégaud.

The Fabre group now manages 247 acres in the Médoc, all certified Cru Bourgeois estates, including Châteaus Lamothe-Cissac, Landat and La Tonnelle, all of which sell their wines directly to importers. What sets Fabre apart from most Bordeaux firms is its investment model—the company raises money by selling shares in a property-sharing group, paying shareholders with wine.

* Bordeaux also attracts institutional investors, and in a recent transaction the $57.6 billion fund La Française increased its extensive vineyard holdings with the acquisition of Château Vrai Canon Bouché and its 37 acres of Canon-Fronsac vines from Philip de Haseth-Möller. The Dutch businessman purchased the estate in 2005, improved the vineyards and hired Stéphane Derenoncourt as consultant. Derenoncourt will remain, and La Française plans to modernize the vat room.

La Française owns multiple estates on the Left and Right Banks. Outside of Bordeaux, it owns vines in Burgundy’s Côte de Nuits and Côte de Beaune, two estates in Plaimont, another two in the Loire and two Châteauneuf du Pape properties.

* On a much smaller scale, Pomerol’s local producers often compete ferociously to expand their holdings by small parcels on the famous plateau. So it was a minor coup for Château La Conseillante to acquire La Gravette, a long, thin plot of vines near Vieux Château Certan and Le Pin, for an undisclosed sum from the Janoueix family. A minuscule 0.82 acres, the new plot will increase Conseillante's production by 1,400 bottles.

"It’s one of the best terroirs in Pomerol," Jean-Valmy Nicolas told Wine Spectator. La Conseillante was created 279 years ago, and this is the first time it has been modified, expanding to 29 acres under vine.

"We really want to increase the size of La Conseillante—if it’s little by little," said Nicolas. "Plots like that come up for sale maybe every five years."

* Olivier at SAFER told Wine Spectator that he expects Chinese vineyard acquisitions to continue at a brisk clip. "The Chinese bought 20 to 30 [wineries] last year, and we have been seeing that rhythm for three years, so we should be near 100 châteaus now," said Olivier.

Industry insiders believe a Chinese investor will soon acquire one of the top estates. Business executives from the People's Republic have gone from searching out good deals in the $5 million range to looking for much more prestigious, and expensive, estates. "There is a strong demand from Chinese buyers for estates at €100 million to €200 million [$137 million to $274 million]," said Olivier.

Another trend among Chinese investors: those who already have one château often buy another. "Some have three or four, one has at least 17," said Olivier.

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