Investment opportunities in Argentina: vineyards
Investment opportunities in Argentina: vineyards
Not for the faint at heart and not a quick flip without any PoW
Welcome Avatar! Today we will be going over some investment opportunities in vineyards and bodegas for sale in Argentina, since that seems to be a very popular request judging from the reactions on the bird app. Let’s dive in.
If you love wine culture this could be a perfect setup for your WiFi business if you are planning on residing on the same property, since Argentina has recently wired the whole country with fiber internet, and speeds are a lot faster than even in most first world countries. My home connection in BA is 300mbps, but if I wanted to, I could bump that up to 500mbps for the insanely low price of $13 US token per month.
Rural areas now have the same type of connection, and similar pricing (except for the Southern provinces, but since there are not a lot of vineyards outside of the Neuquén province, that’s not such a big issue for what we are discussing here).
Wine is no quick degen flip
As a word of warning, one thing to keep in mind is that any agricultural investment, and even more so in Argentina, is HIGH risk and illiquid. Meaning that if you decide to make an investment in this sector, you have to put on your macro hat and be able to ride it out for years, if not decades, potentially at a loss.
This is also one of the reasons why bodegas and vineyards are currently at record lows in US token, similar to the 2001 era after the crash. It was during that time that Salentein (a Dutch family), started buying up acre after acre in Mendoza and Salta, and by now they are one of the biggest wine producers in Argentina, with excellent wines. It took them a lot of hard work.
If you haven’t read part 2 on buying rural property in Argentina as a foreigner, I recommend you read that article as well. There you can find all the nuts and bolts with regards to the regions, buying process etc (and why agricultural land is treated differently vs buying an apartment in a city).
Regions / Provinces - DIY
As I’ve laid out in the post about Malbec wine, there are many wine producing regions in Argentina, with the Mendoza province probably being the most well-known. Mendoza is also the most expensive place because of this, especially around the Maipú and Valle de Uco areas, which are 100% “discovered” and have turned into a bit of Disneyland for Wine in terms of international tourism.
In terms of top to bottom of regions that are completely discovered (which will still have a lot of deals now because many wine producers and bodegas are scrambling to stay afloat, and in these regions you simple have more bodegas 100% “ready to go”) to new and upcoming provinces:
Mendoza
Salta
San Juan
Rio Negro
La Rioja
Jujuy
La Pampa
Catamarca
For the lower range except for La Pampa (which only has vineyards in the southern most point which is already Patagonia), keep in mind that in provinces like Jujuy and Catamarca, there is extreme drought in large areas, and one of the key factors there would be to really find good soil with access to water.
Mendoza, Salta and San Juan also have these issues, but to a lesser degree. Still, always make sure your plot has access to water, this is not a given but a right in many provinces. However, if you have to “create” the access from scratch, things can become a lot more expensive and in some areas could be close to impossible.
For any of the 1-8 regions, I recommend visiting first and really do your research on soil etc if you plan on buying a bodega and doing it yourself. You can also do most of the research with the help of specialized firms (example list for Salta), or ask around at other bodegas to get help of an expert. Most bodegas have these terroir experts in-house, and they are also part of the wine making process.
Turnkey solutions
The inspiration for this post was a tweet by BowTiedVitamins:
In this part we will be going through some of these turnkey solutions for having your own wine in one of the most desirable areas of Mendoza and Salta. These If you are not planning on managing your own bodega or can’t be bothered to deal with the wine process full time, this is a good solution.
Same thing goes for these solutions: as an investment it is not very likely to generate a whole lot of return, but since most of these solutions are located in country clubs, property appraisal is more likely. Plus, you can offer your circle of friends some nice personal wines from your vineyard in Argentina, which is pretty cool.
The price range for these turnkey solutions is around $50,000-$200,000, depending on the area, grapes, and country club management.
If you have local residency in Argentina, up until 2020 you could still finance the payment for some of these (not sure what the situation is for financing now).
Algodón Wine Estates - San Rafael (Mendoza)
Algodon Wine Estates is located in San Rafael and has attractive views of the Andes Mountains. It stands out for its 18-hole golf course, surrounded by vineyards.
It is comprised of 825 hectares, of which 130 are planted with vineyards from 1946. The winery, located 800 meters above sea level, has three main areas: the production and conservation area; the cellar and the laboratory; and tasting room. It also has a large house, built in 1921, which functions as a hostel.
Lots with vineyards US$ 70,000 per hectare (minimum 3 hectares).
Without vineyards, US$ 100,000, from 3,000 to 5,000 m2
Casa de Uco - Tunuyán (Mendoza)
At Casa de Uco each owner can customize the production of their vineyard according to the quality of the wine they want to produce, making decisions together with the agronomists and the oenological team, in charge of the renowned Italian winemaker Alberto Antonini.
The minimum quantity to be produced is one barrel of wine (288 bottles) and the costs vary from US$5 to US$15 per bottle depending on the range of wine and the time and type of storage.
Vineyards: US$ 80,000 for 5,000 sq. meters.
Villas: US$450,000.
The Vines Resort & Spa - Uco Valley (Mendoza)
The Vines Resort & Spa is a Spa hotel in one of the most classic areas in Mendoza that offers a pretty sweet deal in terms of wine management, as BowTiedVitamins points out:
You can find the brochure with all the info here. I couldn’t find current pricing, but for $120,000 + yearly mgmt costs you can get the complete package (they take care of the wine on your plot and you get a 50% discount at the resort, and you get your bottles or sell them back).
Vineyard (1 acre) from US$120,000
Aymuray - Alto Agrelo, Luján de Cuyo (Mendoza)
Aymuray is another option in the same Mendoza area, located at km 38 of Ruta 7, in Alto Agrelo, Luján de Cuyo.
This is a large-scale complex with more than 2,000 hectares. The views are of the Cordón del Plata, a mountain range of the Andes.
Aymuray will have vineyards, villas, a hotel and small themed towns built on the hillside, among other proposals and amenities.
Lots with vineyards at US$50,000
Lots without vineyards at US$30,000 (5,000 m2)
Altos de Tinogasta (Catamarca)
In Altos de Tinogasta plots are about 2,500 sq. meters with varietals of malbec, cabernet sauvignon, tempranillo, chardonnay and torrontés.
In terms of possible profitability, returns are estimated to reach about 10% per year of the invested capital as the plants grow older. The plot itself will likely increase in value as a result of maturation and the yield increase, which would mean an additional profit when you decide to sell the lot.
Lots with vineyards starting from US$ 24,000, 2,500 m2.
Financing options (2020 data): 40% deposit and six instalments.
Estancia Cafayate - Cafayate (Salta)
183 kilometers from the City of Salta and within the Calchaquí Valleys we find one of the biggest re development projects: La Estancia de Cafayate, which has wine and residential sectors.
The estate is about 550-hectare, of which 75 are productive vineyards. The residential area is made up of 400 designed lots bordering vineyards, with a golf course, fields, trees and dunes.
This project is already close to sold out 85%. There are already 78 houses built and the owners come from 34 countries. The site doesn’t mention a timeshare like concept in terms of wines, but if you’re interested to buy this is probably something you could discuss with the management.
Lots: US$65,000 - US$300,000, from 1,100 to 7,000 m2.
Financing (2021 data): 30% advance and 30 fixed instalments in US token.
Autist note: Keep in mind that some of these country clubs are in initial phases, meaning that vines have only just been planted and construction is still under way.
I bought a plot in Cafayate, not in the country club but in the city, with Torrontés on it. At the moment that is harvested by La Estancia, so I should probably ping them and get some bottles in return.
Useful sites
Some good sites for finding rural properties & bodegas are:
https://www.rimontgowineries.com/es/bodegas-en-venta-argentina (more high end)
https://www.inmoclick.com.ar/inmuebles/bodegas-y-fincas-en-venta-en-mendoza
And for the biggest RE sites in Argentina, filter on Province: Salta, Mendoza (depending on where you prefer), and then on Bodega (if available) or Finca, Viñedo:
mercadolibre.com.ar (have to go to RE section)
In general you will not see sale prices here, only if it’s sold/off market. But for commercial and residential real estate there are some really good deals (going up to -20% off the original listing price).
Since bodegas are even less liquid, similar deals and historically low prices should be available now.
See you in the Jungle, anon!