Winemakers, the Newton Johnson family, have announced the co-founding of Hemelzicht Vineyards in the Western Cape’s upper Hemel-en-Aarde valley, which it aims to turn into an investment vehicle.
In what the family calls a first for South Africa, the deal will allow the public to own shares in a luxury wine business with a unique unitised investment model.
The Hemelzicht Vineyards investment model allows for ownership starting at R1 million, and the opportunity to craft wines under the guidance of an experienced, professional management and winemaking team, the group said.
It said that the investment offers potential capital growth, no servicing costs, as well as liquidity. Dividends are paid out to owners in top-quality wine, luxury accommodation amongst the vines on the estate, and in annual cash dividends.
“Hemelzicht Vineyards presents a rare opportunity to buy into a wine business in the heart of the Hemel-en-Aarde, amongst top pinot noir producers such as Newton Johnson, Hamilton Russell, Storm and Crystallum,” said chief executive of Hemelzicht Vineyards, Roland Peens.
“No other wine category sells out as fast as Hemel-en-Aarde pinot noir. There is low supply globally, and this farm is in a prime position to produce world-class wine. With 50% of the shares already spoken for, we are also assured of the demand for this type of unitised investment.”
The 60-hectare Hemelzicht Vineyards estate, headed up by winemaking team Nadia and Gordon Newton Johnson, is set to produce 110,000 bottles annually.
The prime terroir will be organically and sustainably farmed to produce a majority of pinot noir and chardonnay, the group said.
Below is a brief Q&A with Peens which further explains how the model works.
What are the key benefits to the investor?
The owners enjoy a hassle-free investment offering high potential capital growth, with no servicing costs (no monthly/annual levies or fees).
Secondly, the estate will be sales-led, focusing on sales targets to increase company growth. Along with capital growth, dividends are distributed in fine wine and luxury accommodation each year. Cash dividends will be considered in year seven when the estate reaches full production.
What exactly will investors own if they invest in the Hemelzicht Vineyards venture?
Shareholders will own equity in the company that owns the wine estate land, the brand,villas and winery.
Along with South Africans, investors from the UK have shown the strongest interest to date. There has also been interest from the US, Europe, the Middle East and the Far East.
Widespread shareholding aids the model, and we envisage around 30 shareholders from approximately 10 markets. We will, of course, assist international members with the export of their wine dividends.
Are there similar investment models on the global arena? How do they compare?
Similar international options allow you to invest in projects within a wine business such asWinefunding.com and Smergers.com.
The Hemelzicht Vineyards model allows investors to become owners and enjoy the same rights as the other shareholders.
Vineyard & Terroir Fund is a managed investment of wine estates around the world but offers none of the lifestyle benefits. The successful Napa Valley Reserve is a VIP wine club that produces wine exclusively for members, but excludes equity ownership.
How will dividends be issued to shareholders?
20% of the wine production is declared as dividends to shareholders, which will be 220+ bottles per share by 2026.
The three luxury villas in-between the vineyards and fynbos will also offer owners 15 days of accommodation per share per annum.