Kurow Estate Winery information memorandum

Information Memorandum

KUROW ESTATE LIMITED 5292 Kurow Duntroon Road, Waitaki Valley, North Otago

Licensed under REA 2008

For Sale by Deadline Private Treaty (unless sold prior) Closing at 4pm, Thursday 25th July 2019

Boundary lines are indicative only

INTRODUCTION Waitaki Valley North Otago based Kurow Estate Limited is a boutique New Zealand wine company with an 11.5 ha vineyard and winery and cellar door at 5292 Kurow-Duntroon Road.

The company has appointed Colliers International to offer its vineyard, winery and business assets (excluding brands and stock) for sale, either as a going concern or as individual assets. The assets are offered for sale by deadline private treaty (unless sold prior) closing at 4pm on Thursday July 25th 2019.

North Otago is New Zealand’s newest wine region (with grape plantings commencing in 2001) and although it is still very small in comparison to other regions, some of its wines have been highly acclaimed and have put Waitaki Valley on the international wine map.

The Waitaki Valley appears to have an exciting future as there is growing awareness of the impact that climate change may have on the established NZ wine regions - and a perception that climate change could work in this region’s favour in the long term.

Kurow Estate Limited owns a prominently located 16.367 ha property which enjoys a high profile on State Highway 83, approximately 4kms south of Kurow. Located on the popular Alps2Ocean bike trail, the property has a vineyard planted in pinot noir, pinot gris, chardonnay, gewurztraminer, riesling and viognier which is farmed organically.

The winery building of approximately 1,560m² houses the cellar door tasting facility, offices, laboratory and full winemaking facility through to bottling and warehousing. Given its location and size, the building has potential for rationalisation to include alternative complementary uses.

This is a rare opportunity to purchase boutique vineyard and fully integrated winery business assets with exciting long term potential.

Twizel Timaru

Wanaka

Kurow Kurow Estate

Kurow Estate Cromwell

Oamaru

EXECUTIVE SUMMARY The assets of Kurow Estate Limited are offered for sale, either as a going concern (excluding brands and stock) or as individual assets. The company assets include:

THE WINERY AND VINEYARD The 16.367ha property (on one title (Lot 1 DP 388491)) comprises a vineyard of 11.6 ha and a 400 tonne winery and cellar door, a five bedroom dwelling plus sheds. The vineyard which is planted in pinot noir, pinot gris, chardonnay, gewurztraminer, riesling and viognier is farmed organically but it should be noted that the vineyard is effectively ‘mothballed’ now and is only producing enough grapes to satisfy current demand for the branded wines produced by Kurow Estate. It should be noted that the property is zoned Rural General in the Waitaki District Plan and subdivision to a minimum allotment size of 4.00ha is permitted (as a controlled activity).

The winery building of approximately 1,560m² houses the cellar door tasting facility, offices, laboratory and full winemaking facility through to bottling and warehousing. Given its location and size, the building has potential for rationalisation to include alternative complementary uses.

Other buildings on the property include a three bedroom cottage of approximately 82m² plus two bedroom annexe of 51m² as well as an implement shed (170m² approx), utility shed /workshop (280m² approx) and two pump sheds.

PLANT & EQUIPMENT The winery equipment includes a selection of insulated and non- insulated tanks with a total capacity totalling almost 100,000 litres. Other notable items include a Diemme Tecnova80 press, an Alfatek Elvira LP 12.4.12 bottling plant, Enolmeccanica bottle capper and Enos Euro Quadra bottle labeller. We have been advised that the bottling line (which we understand to have cost $240,000) has capacity of 2500-3000 bottles per hour.

Brief details only are included in this information flyer. Detailed information (including a LIM report) will be available to parties on request.

THE WINERY + CELLAR DOOR With its prominent location on State Highway 83 and on the popular Alps2Ocean Cycle Trail, the Kurow Estate cellar door and winery building is well situated for direct-to -customer sales. The building was erected in two stages - in 2001 and 2007 - and measures approximately 1,560m² arranged as follows: m²

Total m²

Ground Floor Kitchen, café and tasting

120

Main storage areas and amenities

314

Covered press area

336

Main winery complex

660

Sub total

1,430

First floor Office and amenities Deck

100 30 130

Total

1,560

The building which was originally built as a fruit packing shed and extended and upgraded for its current use has concrete foundations and flooring, part with timber overlay. The walls are Colorsteel and insulated panels on steel portal frame and the roof is Colorsteel.

CELLAR DOOR & OFFICES The cellar door comprises a café, wine tasting area, commercial kitchen and dry goods store. Amenities include separate shower and toilet facilities with both internal and external access.

The first floor comprises three offices, a boardroom and storage areas.

WINERY The winery is arranged to provide a tank ferment area of approximately 322m², a covered press area of 336m², a bottling room (98m²), bonded wine store and storage areas.

Details of the plant and equipment are set out on page 10.

It should be noted that the winery is ‘mothballed’ as there is currently insufficient grape supply from the Kurow Estate vineyard to justify operating the facility. In addition, there is no contract processing being undertaken.

Given its location and size, the building has potential for rationalisation to include alternative and/or complementary uses.

PLANT & EQUIPMENT

Kurow Estate Limited has established its winery to be able to process up to 400 tonnes of grapes. The original intention was to be able to process grapes for other wine companies and growers in the region as well as grapes from the company vineyard.

In recent years, the company has downscaled operations and now operates at approximately 10% of capacity. In addition, the company has not secured sufficient grape processing contracts to enable it to operate anywhere near full capacity. Consequently, the winery is now ‘mothballed’ as there is insufficient grape supply from the KEL vineyard and from other growers to justify operating the facility.

The winery has been designed and equipped to the highest standards and the plant and equipment schedule includes the following: • • •

Bottling line including an Alfatek Elvira LP 12.4.12 bottling plant, Enolmeccanica bottle capper and Enos Euro Quadra bottle labeller. We have been advised that the bottling line (which we understand to have originally cost over $240,000) has capacity of 2,500-3,000 bottles per hour.

Diemme Tecnova80 press 30 tanks ranging in size from 200 litres to 10,000 litres. Total capacity totals almost 100,000 litres.

A schedule can be provided on request.

The vineyard plant and equipment includes: • • • • • •

Nets Sprayer Harvester New Holland tractor TNF 80 Fiat tractor 62-82 DTF with Front Forks Fertiliser spreader

A full schedule of winery and vineyard plant and equipment can be provided on request.

VINEYARD

The vineyard which was planted in 2007 in pinot noir, pinot gris, chardonnay, gewurztraminer, riesling and viognier is farmed organically. Historically under traditional viticulture management the property produced between 50 and 60 tonnes but under organic management, it is likely to produce between 30 and 35 tonnes (yields of 2.5-3 tonnes/ha for red wines and 5-6 tonnes/ha for white wines).

However, the vineyard is effectively ‘mothballed’ now and is only producing enough grapes to satisfy current demand for the branded wines produced by Kurow Estate Limited.

Varietal

Vines

Ha

Pinot Gris

10,375

2.49

Malvasia Bianca

500

0.12

Gewurztraminer

7,447

1.79

Riesling

4,054

0.97

16,612

3.32

Chardonnay

9,475

2.16

Viognier

2,884

0.69

51,347

11.54

Pinot Noir

PLANTING SCHEDULE Block A

Pinot Gris

Barrie

101/14

6,748

1.62

Block A

Pinot Gris

Barrie

Schwartz

496

0.12

Block A

Malvasia Bianca

UCD 3

3309 C Germany

500

0.12

Block B

Gewurztraminer

456

3309

868

0.21

Block B

Gewurztraminer

456

Riparia Gloire

868

0.21

Block B

Gewurztraminer

457

3309

620

0.15

Block B

Gewurztraminer

457

101/14

620

0.15

Block B

Gewurztraminer

GM11

3309

992

0.24

Block B

Riesling

239

Schwartzman

3,348

0.8

Block B

Riesling

110

Schwartzman

520

0.12

Block B

Riesling

49

3309

186

0.04

Block C

Pinot Noir

777

3306

3,068

0.61

Block C

Pinot Noir

777

Schwartzman

118

0.02

Block C

Pinot Noir

UCD5

3309

1,886

0.38

Block C

Pinot Noir

UCD5

3306

408

0.08

Block C

Pinot Noir

667

Schwartzman

2,970

0.59

Block C

Pinot Noir

667

3309

160

0.03

Block C

Pinot Noir

Abel

Schwartzman

3,071

0.61

Block C

Pinot Noir

Abel

101/14

558

0.11

Block C

Pinot Noir

114

Schwartzman

968

0.19

Block C

Pinot Noir

115

3309

1,685

0.34

Block C

Pinot Noir

115

Schwartzman

621

0.12

Block C

Pinot Noir

Abel

3309

1,099

0.22

Block D

Chardonnay

95

101/14

6,576

1.58

Block D

Gewurztraminer

1148

3309

2,234

0.54

Block D

Gewurztraminer

GM11

3309

1,245

0.3

Block D

Chenin Blanc

VT

3309

100

0.02

Block D

Viognier

642

Schwartzman

2,884

0.69

Block D

Pinot Gris

.2/15

Schwartzman

2,414

0.58

Block D

Pinot Gris

KWV40A

Schwartzman

717

0.17

Block E

Chardonnay

B95

Schwartzman

2,899

0.58

51,447

11.54

SUMMARY OF KEY INFORMATION LAND AREA

16.367 ha

LEGAL DESCRIPTION

Lot 1 Deposited Plan 388491

TENURE

Freehold estate in fee simple

RATING VALUATION (01/09/2017) $1,470,000 (land:$460,000; improvements: $1,010,000) RATES

$2,962.42 (to June 30th 2019)

ZONING

Rural General (Waitaki District Plan). Subdivision to a minimum allotment size of 4.00ha is a controlled activity. Development controls include a 20 metre set back from State Highway with a maximum building height 10m

SOILS

Otiake soils – free-draining medium to good quality soils, 0.2m silt loam, 0.3m sandy silt on Greywacke and sub-schist gravels.

VINEYARD PLANTED AREA

11.54 ha

VARIETALS

Pinot Noir (28.8%), Pinot Gris (21.6%), Chardonnay (18.7%), Gewurztraminer (15.5%), Riesling (8.4%) and Viognier (6.0%)

VINES

The vineyard was established in 2007. Blocks A, B and D have been established on 2 metre row spacing between the rows and 1.2 metre spacing within the row between the vines and Blocks C and E have been established on 2 metre row spacing between the rows and 1 metre spacing within the row between the vines.

WATER

• •

•

Domestic and winery, electric pump from a spring, 50.000 litre storage, UV light and filtration system installed, electric pressure pump Irrigation CRC081841.1 to take 17.5 litres per second at a maximum amount of 504 m3 per day, from a spring for a term expiring 05 June 2031. 11 KW electric pumping system to dripper irrigation to vineyard plantings.

Frost protection: Upper Waitaki Community Irrigation Company limited supply, 14 shares, utilized for frost protection, raise filled storage dam, diesel and electric pumping systems for overhead sprinkler frost protection to 11.6 ha of vineyard plantings.

SALES PROCESS METHOD OF SALE For Sale by Deadline Private Treaty (unless sold prior) closing 4pm, Thursday 25th July 2019.

DUE DILIGENCE To assist in the assessment of this opportunity, comprehensive due diligence information is available via an online data room.

Online data room www.infopack.co.nz • •

Certificate of Titles Land Information Memorandum

This Information Memorandum provides preliminary information to assist interested parties with their assessment of the property.

All enquiries, requests for information and arrangements to undertake inspections in relation to this property opportunity are to be directed to the sole agents, Colliers International: Mike Laven Rural & Agribusiness M: 021 681 272 E: mike.laven@colliers.com

Colliers International Level 10, 36 Customhouse Quay Wellington Central P: 04 473 4413

Steve McIsaac Development & Business M: 021 680 304 E: steve.mcisaac@colliers.com

Colliers International The Top Floor, 10 Athol Street Queenstown P: 03 441 0790

Disclaimer: This Information Memorandum has been prepared by Colliers International solely for information purposes in order to assist interested parties in making an initial evaluation of the property and does not constitute advice nor purport to contain all of the information that a prospective purchaser may require. In all cases, interested parties must conduct their own investigation and analysis of the property and the data set out in the Information Memorandum to satisfy themselves in all respects and must not rely on the information in this Information Memorandum to make their purchasing decision. This Information Memorandum has been prepared in good faith and with due care by Colliers International, but neither Colliers International, nor the owner accept responsibility hereunder for the accuracy of any part of the information contained in this Information Memorandum. Therefore the recipients of this Information Memorandum to the extent that they rely on the information contained herein do so entirely at their own risk. The owner and Colliers International (and its brokers) expressly disclaim all liability for representations, express or implied, contained in, or for omissions from, this Information Memorandum or any other written or oral communication given to any prospective purchaser in the course of their evaluation and/or offer. This Information Memorandum does not constitute an offer for sale or purchase or otherwise.