Source: Financial Times
By: Nick Foster
03.14.2009
Travellers arriving in Mendoza, Argentina's wine capital, invariably do so with a sense of relief. Arriving from Chile in the west, the descent from the barren peaks of the Andes often signals an end to altitude sickness. Crossing the flat and mainly treeless pampa from the east, meanwhile, the sight of snowcapped mountains - and the prosperous, green city at their feet - ends the monotony.
David English, 37, originally from Nashville, had an extra reason to feel at peace when he relocated to Mendoza from the US. He was at his desk at a telecommunications company a block from the World Trade Center in New York City on the morning of September 11 2001 and decided to move to Argentina, a country he had visited for the first time on a Rotary Club exchange programme, partly because of the attacks. He settled on this particular region "because it offered a lifestyle that was difficult to find in the US". "You can walk more or less everywhere, the city centre is compact and vibrant and full of cafés and people prioritise personal relationships over possessions," he explains.
Despite its decidedly provincial atmosphere, the Mendoza metropolitan area has nearly 850,000 inhabitants, making it the fourth most populous in Argentina. And, after Buenos Aires, it vies with Bariloche in northern Patagonia as the most popular destination for foreign homebuyers.
English now rents a modern, 80 sq metre, one-bedroom apartment in a quiet central area of Mendoza city and works as an adviser to expatriates purchasing property in the region, especially agricultural land such as farms and vineyards, an increasingly coveted but challenging category. "Fundamentally, our job is to steer clients away from poor investments such as land that wouldn't work for growing grapes for reasons of inadequate water supply, unacceptable frost risks or problems with title," he says. "We help set up operations with experienced local professionals so the projects have the best possible chance of success and we act as their eyes and ears on the ground when they are not in Argentina."
Prices of vineyard land rose in the years following the Argentine meltdown of 2001-2002 in line with both increasing national real estate values and the rising popularity of Argentine wines abroad, particularly reds from the Mendoza region, which dominate overseas sales. "Expect to pay as much as $60,000 for a hectare of mature vineyard in a top location, though in lesser areas you could pay less than half that." (Agricultural land is invariably advertised in US dollars in Argentina.)
Martin Carballo of Mendoza's Contacto estate agency says that, although prices were broadly stable in 2008, he expects them to fall this year. He is selling an established 20.5ha vineyard with an estate house in prestigious Luján de Cuyo for just over $1m, while a 33ha mixed vineyard and orchard in Tupungato, also with an estate house included, is $600,000. These are two of a number of communities, often with their own central squares and public buildings, that are spread out among the vineyards but have over time grown together to form a single, semi-urban region.
It is not uncommon for properties to come without houses or with ones in need of serious repair because the former owners were Argentines, who "tend to prefer living in urban areas away from their land, near good schools and hospitals and other amenities, if they can afford it", English says. (Earthquake damage is another issue; the most recent, in 2006, affected 600 buildings, though most were already in poor condition.)
With more foreigners moving in, however - it's estimated that approximately 3 per cent of land in Mendoza province and a majority of its two thousand wineries are now owned by non-Argentines - residential construction is on the rise. English says costs range from 1,500 pesos per sq metre ($415 per sq metre) for a basic dwelling to much more for a luxurious estate.
Paolo Addis, 34, a winemaker of AngloItalian heritage, owns and lives on Viña Esencia in the Uco Valley, along with several stray cats and dogs he's taken in, and has malbec, merlot, syrah and sauvignon blanc vines planted on nine of his 18ha. He says bureaucracy is a problem and owners like him were concerned by a provincial senate proposal - now shelved - to set up a register of non-Argentine landholders and the origin of the money used to make their purchases. But his reasons for settling in the region were simple: "It's a great time to be making wine in Mendoza since the product is now really breaking through on to the world market."
For househunters who want to be near the vineyards but not on one, running it, there are also options. Cocucci Inmobiliaria is marketing a four-bedroom, four-bathroom house with swimming pool in a secure development in the Mendoza suburbs for 860,000 pesos as well as a range of entry-level, two-bedroom apartments, close to the city centre and with private parking, starting at 150,000 pesos.
Frenchman Jérôme Constant, 36, settled in Mendoza, in an apartment like English's, with the intention of setting up a business. "After the financial crisis of 2001-2002 and the subsequent devaluation, I knew there had to be opportunities," he explains.
The result is the Anna Bistro, a restaurant with room for 140 diners that has in the three years since it opened become a firm favourite of the city's business community when they are in relaxation mode. "For a restaurateur, what is wonderful is the variety of fresh produce, much like what we have in Provence," Constant says. "Obviously the region is known for its wines but it also produces delicious peaches and pears, asparagus, tomatoes and almonds, to name but a few. We can make a delicious tapenade from locally produced olives."
Kelly Thornhill, 32, from Cheshire, UK, is another convert. Having moved to Mendoza five years ago, she runs The Grapevine Wine Tours, a company specialising in guided visits to the region's top wineries, and lives in a bungalow with its own small orchard in Luján de Cuyo. She has also bought a 1,000 sq metre building plot in a gated community nearby and hopes to start building on the 85,000 peso property in December.
"What is nice about Luján de Cuyo is that it is on higher ground than Mendoza city and so is usually several degrees cooler, which makes it more pleasant in the hot summer months," she says. She enjoys living in Argentina because "as a foreigner, you don't get treated much differently from the locals; you can blend in more easily than in Peru and Colombia, for instance" and the late summer grape harvest between March and April is unquestionably the high point of her year. "Everyone works towards it, is in some way connected to it and celebrates it."
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