Dairy Land to Viticulture

May 13, 2015 at 9:19 am

The recent announcement of the sale of Hawke’s Bay Dairies main dairy farm and Rauriki blocks to Delegats for $29,300,000, sets a new precedent for land values in the Hawke’s Bay locality.  The change of land use from dairy to viticulture highlights the versatility of flat land with irrigation.

Analysis of the value of the flat land suitable for planting in viticulture on a per hectare basis is close to $43,000/ha.  There are many factors to consider in arriving at this value including the value of the water consents and any surplus water, the value of surplus land not suitable for viticulture, particularly on the Rauriki block, the value of forestry and the added value of plant and improvements on the dairy farm to a viticulturist.  Our analysis of close to $43,000/ha is well above values seen in the locality in the past.  However as the sale is in close proximity to existing Delegats operations, an adjoining owner premium is also worthy of consideration.

If this level of value becomes the new norm for bare land suitable for viticulture perhaps the Ruataniwha Plains may become a sea of vineyards when the dam proceeds.

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Entry filed under: Rural Market.

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