Argentina hot on wine investment
Forget buying an apartment or house in Argentina – the
canny investor should be looking at vineyards, according to one
expert in the South American property market.
Residential prices in Buenos Aires have been rising since 2003.
Today, prices for apartments are at an all-time high and are not the
necessarily the investment bargain they once were.
Look beyond it to Argentina’s interior advises Lief Simon.
‘Productive land is the buy today. I find vineyards a good
choice, with good profit potential. You won’t likely see your
investment double in a year, but the values can be excellent,’
he said.
Argentina boasts many wine regions, mostly in the provinces
bordering the Andes. The high, dry climate is perfect for
controlling the amount of water the plants receive. From the
provinces of Salta to Rio Negro, there are vineyards. But the most
productive province is Mendoza.
Mendoza is being compared to Napa Valley for both the volume and
the quality of wine being produced. It’s increasingly like
Napa Valley in another way, as well. Mendoza is beginning to try to
make a business of wine tourism, attracting growing numbers of wine
enthusiasts from around the world. Vineyards are opening restaurants
and boutique hotels and offering tours and tastings.
They have even begun putting up signs pointing the way to their
bodegas. The downside is that this makes Mendoza one of the most
expensive wine regions in Argentina. But expensive for Argentina can
be cheap in a broader context. In California’s Napa region,
for example lands costs around $ 41,700 per acre and as much as $
116,700 per acre planted with mature vines.
Land suitable for planting vines in and around Mendoza city can
go for as little as $4,170 an acre if buying at least 240 acres. Get
off of the beaten path in the surrounding province, just beyond the
current main wine corridor, and you can find land good for vines for
as little as $1,670 an acre. For land already planted with vines the
cost is $8,340 per acre.
Planting vines costs between $3,340 and $5,000 per acre depending
on the water system, the total area planted, and whether or not you
put up netting to protect from hail and birds.
Liam Bailey, head of international research for property
specialists David Stanley Redfern agrees that Argentina has a lot of
potential as it is increasingly popular with tourists. ‘Rental
yields are already around the ten per cent mark and capital
appreciation is conservatively estimated at 15 %,’ he said.
There are no restrictions on foreigners buying property in Argentina
but investors need to register for tax. Argentina has no capital
gains, inheritance or gift tax and rental tax is 21% gross of annual
income.
