New Zealand's leading primary sector syndication company MyFarm and Misty Cove, one of New Zealand's fastest growing wineries, have teamed up to develop and improve a $13.8m vineyard to help meet the burgeoning demand for Marlborough wines.
MyFarm's Kintyre Vineyard Partnership is now seeking capital to buy a 147ha property south west of the Wairau Valley township that it will be leased to Misty Cove. The syndicate will allow Misty Cove to invest in what it does best: the production, marketing and exporting of wine rather than tying up capital in land. In return investors in the partnership are being offered the security of land ownership and expected monthly distributions of 7% per annum.
Misty Cove, which for the past two years has featured in Deloitte's Fast50 list of New Zealand's fastest growing companies, has seen sales of its products surge by 900% over the last three years lifting it into the ranks of New Zealand's Top 20 wineries by volume. It is currently selling its product into 53 different countries and despite the COVID-19 pandemic is scoring strong successes with key retailers in Europe and North America.
The offer comes amid a surge of investment into the primary sector as kiwis seek exposure to the backbone of the New Zealand economy, the prospect of regular and attractive cash returns and tangible local stories. Since April 2020 MyFarm has raised $110m of investor equity, double the average annual investor equity it raised between 2016 and 2018.
MyFarm Chief Executive Andrew Watters said: "Primary sector investments have proved resilient in the face of many Covid-19 related challenges over the past year. Meanwhile, the Kintyre Vineyard Partnership offers wholesale investors a rare opportunity to share in the international success of a Marlborough and New Zealand success story.
"In the current low interest rate, low dividend yield environment, quality land-based investments with in-demand products sold through best-in-field companies generating cash profits, are attracting strong investor interest."
The Kintyre Vineyard Partnership covers 93.2 canopy hectares (cha) of vineyard. The predominant variety is Sauvignon Blanc occupying 60% of the planted area, followed by Pinot Noir (31%) and Pinot Gris (9%). The property also has 17 frost fans that provide crop protection from late spring and autumn. MyFarm plans to drive productivity improvements and add value to the property through the installation of water storage, some vine redevelopment and closer attention to key management practices.
The vineyard will be operated by the existing management through to June 2021 with partners receiving the net crop proceeds from the 2021 vintage. It will then be handed over to Misty Cove Wines to lease for an initial period of 10 years. Misty Cove will be responsible for all operating costs, outgoings and the on-going maintenance of the vineyard while leased. The partnership will be responsible for capital expenditure.
Misty Cove Founder and CEO Andrew Bailey said he was looking forward to adding Kintyre to 500ha of vineyards currently under the company's control.
"The Marlborough wine industry is really buoyant. We are currently sold out and we have customers lined up for the 2021 vintage. The arrangement with MyFarm will further position Misty Cove to take advantage of the continuing growth we see."
The total cost of purchasing Kintyre Vineyard is $13.8m, or $148,100/cha. MyFarm is seeking investor equity of $11.0m (1,100 units at $10,000/Unit) and will take on up to $5.04m of debt to fund the balance of the purchase price and planned development.
"At MyFarm we offer a range of investment opportunities that allows investors to take a portfolio approach to investing in the primary sector. The Kintyre Vineyard Partnership offers the prospect of attractive long-term cash returns. This can fit well as part of an investor's portfolio," Mr Watters said.
For more information:
Wholesale investors can obtain more information about the investment and an information memorandum at https://www.myfarm.co.nz/kintyre or call:
MyFarm Head of Sales
Tel: 029 445 5871