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Last Wednesday, Andrew Peller Ltd. announced plans to build a new home for the Gretzky wine brand in Niagara-on-the-Lake. Plans to build a new home for the winery were reported as far back as 2011, but at the time Peller did not have any confirmed plans in place, they did however acknowledge that the winery would be located on a part of the brand’s vineyard holdings.
The wineries construction plans and how that affects the property value
Construction of the new winery will begin this fall at the corner of Line 3 and Niagara Stone Road. The property is a part of Peller’s land holdings but has never functioned as grape producing land. Former uses include raising beef cattle and farming tomatoes. Site plans for the winery list a 15,000 square-foot building that includes retail, tasting, fermentation and barrel cellar space. The brand plans to plant a few acres of vineyards to be used to create new wines.
The value of the property will increase not only from the development of the new facilities, but from the repurposement of the land for grape growing uses, as grapes compromise Ontario’s highest farm gate value of any of its fruit industries. Winery property values have generally increased in value over long periods of time due to the success and demand of the industry, Peller’s investment in the property should translate into a steady increase in value of the property going forward.
Peller’s vineyard land holdings
Peller owns vineyards and wineries in British Columbia, Nova Scotia and Ontario, that amounts to over 600 acres in total. Approximately 300 acres of Peller’s vineyards are located within the Niagara region. Land is valued at as high as $100,000 per acre dependent on the location, type and quality of the vinifera. When most of the vineyards were purchased the land was dedicated to tender fruit farming and was worth anywhere between $5,000 and $10,000. A number of Peller’s land holdings have come from the acquisition of brands under its portfolio.
Gretzky’s former Vineland site
This will be Gretzky’s second winery location within Niagara. Before Andrew Peller Ltd. purchased the brand in 2011, the winery was located at 3751 King Street in Vineland, on the former Willow Heights Estate Winery property. The winery opened in summer of 2008 and was run through a partnership with Creekside Estate Winery owners and Gretzky. That property was put up for sale and is now home to GreenLane Estate Winery.
Each time that the winery has been repurposed, significant investments have been made into improving its condition. Improvements to the wineries are generally assumed to increase the value of the land of each property. In a case study on the wine industry's impact on land values, Lisa Campbell found that the value of an acre of land on the Willow Heights Estate Winery property increased from $30,795 on 1997 to $83.987 upon its sale in 2008.
If you are a winery owner and are interested in learning the value of vineyard land, connect with a Niagara real estate appraiser today.To read more about winery developments in Niagara click here.
