Major local players have been active, but outsiders have woken up to the region’s importance.
WHEN Paul Holmes à Court outlined an ambition to build one of the world’s great wine estates he made it appear to be a journey of patience, one that might match the 50-year distance Vasse Felix had already travelled.
It was 2017 when Mr Holmes à Court showed his hand to Business News, having taken over Margaret River’s oldest winery from wider family interests a decade earlier.
In that time, Heytesbury Group had already bolstered its holdings by more than 60 per cent, bringing it to more than 300 hectares of land in the region broadly defined as Margaret River.
Some might argue that ambition has turned into something of an obsession in the five years that have followed.
Property records show Heytesbury or its interests have spent around $33 million in the subsequent period, acquiring more than 400ha of mainly vineyards or land with potential to be so.
Much of that has been for the new brand Heytesbury launched in September, a 10-year project to develop a sparkling wine business called Idee Fixe, an apt name given it is a French expression for obsession.
The Idee Fixe concept arose from what the group says was the accidental discovery of a champagne clone growing on part of an 80ha Karridale site purchased in 2009.
Idee Fixe has been given its own headquarters, at the 185ha site of former tax-scheme-funded Watershed Wines, acquired between 2015 and 2018 for almost $22 million.
The winery has since been completely overhauled and the same is planned for the former restaurant.
In September, a further 189ha of land adjoining the Witchcliffe holding was bought by the group, although it is not yet revealing its plan for this land, which brings Heytesbury Group’s holdings in the region to about 730ha.
While Heytesbury dominates the dealmaking, some other big names in wine have expanded their holdings. Voyager Estate, now part of Alexandra Burt’s assets under The Landsmith Collection, bought 74ha for $3.7 million in May 2021.
Like the most recent Heytesbury purchase, Voyager’s latest land addition appears to be vacant farmland.
The Burch family has also been active in the area.
The $4 million-plus paid in the past two years by interests associated with the family behind Howard Park, Marchand & Burch and MadFish secured 83ha of land with considerable vineyards on them.
Howard Park was originally a Great Southern operation, but since being taken over by Jeff Burch has shifted its operational headquarters to Margaret River, with its main outlet at Cowaramup.
Another wine family from the Great Southern to add a bit of Margaret River to its holdings was the Swinneys.
A pioneering family from Frankland River, the family acquired 60ha in October that was home to Brookland Valley Estate for some decades.
Positioned on Caves Road in Wilyabrup and home to Flutes Restaurant, the land includes a 15ha vineyard, which will be leased back to the vendor Accolade Wines, which has been selling down its physical assets in the state while retaining the brand names.
While the deal might look high on a per-hectare basis, the lease-back agreement is part of that value, and the location is stunning.
Swinney chairman Matt Swinney describes the site as world class and the established vineyard fits the business model.
“Part of our business is managing vineyards,” Mr Swinney said.
He said there was no intention to move the business from Frankland River, but the new site gave the group room to do something “distinctly different” if the opportunity arose.
A couple of months earlier, Accolade had sold its Nannup winemaking facility to Western Australia’s largest player in the industry, Peter Fogarty’s Fogarty Wine Group.
Under the multi-million-dollar deal, Houghton and Brookland Valley wine will continue to be made at the Nannup facility, meaning Fogarty will produce all of Accolade’s WA wine.
In WA, it owns Millbrook Winery in the Perth Hills, Deep Woods Estate in Margaret River, and Smithbrook in Pemberton.
It also owns the Evans & Tate brand, contract wine making facility Margaret River Vintners, and Bunkers Beach House cafe.
Fogarty Wine Group’s consolidation in WA is counter-weighted by significant interests interstate, including NSW, Victoria and Tasmania.
In the island state, Fogarty Wine Group is pursuing a scale strategy similar to WA, with significant vineyards and enough winemaking capacity to keep production cost per bottle at the lower end of the premium market.
But it isn’t just local wine producers that are paying attention to the Margaret River region.
Two big recent transactions have signalled that it is again in the sights of national and offshore players.
It was big news that listed Woolworths spin-off Endeavour Group, which owns Dan Murphy’s liquor stores, ALH hotel group and several leading wineries, had acquired Cape Mentelle, one of Margaret River’s most prestigious brands.
The details of the deal were not disclosed, although estimates suggested a $20 million price paid to long-term French owner LVMH.
Perhaps more intriguing was news that a company linked to Hong Kong’s richest person has emerged as a major buyer of vineyards in Margaret River.
The 182ha Edinger Estate was acquired a few days before Christmas for about $10 million by Belvino Investments, a part of Li Ka-shing’s CK Hutchison Holdings.
Belvino or its associates now own about 650ha of land in the South West with about 350ha under vine, for which about $25 million has been paid since 2012.
The vineyards are understood to be leased to other major wine players in the state and are part of a wider strategic agribusiness play.
Selling signals
Two other purchases signal interest from another direction. Iron ore magnate turned real estate developer Tony Poli emerged with a footprint in the wine sector, buying the 30ha site that has been home to Carpe Diem in Wilyabrup.
Gianfranco and Francesca Anderle have been in the region for two decades and planted their 13ha vineyard between 2003 and 2005.
In a story that may well be repeated across the area as pioneering energy wanes and the next generation shows less enthusiasm for the task, the Anderles are in the process of closing down their winery.
“It was the right time to shut that chapter and go to the next one,” Mr Anderle said.
Other vineyards known to be on the market are Thompson Estate, with more than 25ha of land and a 250-tonne capacity winery being offered for sale due to the owners’ retirement, as well as organic wineries Blind Corner and Devaleski.
It is understood Margaret River Winemakers, a 1,500t winery with a craft distillery in Metricup, may have found a buyer.
Boutique Property and Advisory director Mike Calneggia said the prices being paid for vineyards were rising with most of the recent transactions pushing beyond $100,000 per hectare of planted vineyard.
“People are trying to find ways of getting supply,” Mr Calneggia told Business News.
“It happened like that in the mid-1990s.”
Busselton-headquartered Acton Belle Property South West director, Brian Moulton, is more cautious about tipping a new pricing level at $100,000/ha of planted vineyard.
But Mr Moulton believes recent prices have set a new bar at around $80,000 and are now pushing the six-figure threshold as fruit supplies become locked up and there is little room to develop new vineyards.
The second notable alternative deal is that of the Medich family’s $6.5 million purchase of a 42ha property on Wildwood Road with established vineyards, a big dam and two residences with views across the Gunyulgup Valley.
The property was sold in June by long-term owner Dirk Hartog Pty Ltd, which had Jacob de Jong as its sole director, but the price and the new owner remained undisclosed until recently.
Interests associated with Peter Medich have also recently bought a short-stay accommodation asset in Cottesloe and it is understood the buyer plans to develop a tourism opportunity on the Yalingup property while retaining the 20ha of vines.
Two years ago, another side of the Medich family acquired the Mount Pleasant wine business in NSW.
That approach highlights the further strengthening of wine as a drawcard for tourists, as well tourists being a major market for winemakers.
Aside from Heytesbury’s Margaret River Hotel buy, a little over a year ago Andrew and Nicola Forrest’s Tattarang paid $9.2 million for Yallingup’s Cape Lodge, including the 3ha private vineyard which exclusively produces the hotel’s premium wine.
The 16ha site was first opened as a six-room luxury bed and breakfast in 1993 but grew to feature 22 rooms following an extensive renovation in 2003.
Margaret River Wine Association chief executive Amanda Whiteland said all the talk of big deals and industry consolidation ignored the fact that three quarters of the region’s wineries produced 4,000 cases or fewer per year.
Ms Whiteland said there were definitely moves to take advantage of the luxury end of the market, as well as WA’s seeming avoidance of the issues over east faced by other states where China import bans had caused oversupply and hot weather had affected growing seasons.
“I almost feel guilty,” she said when dealing with eastern states counterparts.
“We are in a good position in Margaret River.”
