Roland Peens, CEO of Hemelzicht Vineyards Talks About Investment Model Facilitating Wine farm Ownership
Q: Roland, your experience in fine wine spans decades. Please tell us about your background.
A: Having studied economics at the University of Stellenbosch I fell in love with wine and the industry. I later studied wine and worked in exports, marketing, sales and as a sommelier in London. Over the last 15 years I have been at the helm of leading retailer WineCellar.co.za and continue as a director. Most notably, in 2018 we launched South Africa’s first wine investment products and in 2019, Strauss & Co Fine Wine Auctions.
Q: How did the Hemelzicht Vineyards opportunity come about?
A: Hemelzicht Vineyards was born when I sat next to Cairo Howarth on a bus during the annual Hemel-en-Aarde Pinot Noir Celebration. The local resident and successful entrepreneur was excited by a particular property, as well as a model to make owning a wine estate and brand more accessible, as were the Newton Johnson’s. We all recognised the value of this opportunity, especially with the high Hemel-en-Aarde brand equity. During 2020 we built a unique model to develop the prime Hemelzicht Vineyards.
Q: What makes this unitised investment model so special?
A: Typically to own a wine farm you would have to invest tens or even hundreds of millions of rand, with specialised management and experience requirement. The Hemelzicht Vineyards investment model is unique in that you can become an owner for as little as R1 million, and it allows shareholders to enjoy the benefits from year one, in a simple fractional ownership investment. Importantly, the founder families of Newton Johnson, Howarth and Peens bring vision, experience, and track record to the development. We forecast high share-liquidity as the management team will meet prospective buyers with sellers. There is also no lock-in period for investors.
Q: What are the key benefits to the investor?
A: 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 the 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 7 when the estate reaches full production.
Q: What exactly will investors own if they invest in the Hemelzicht Vineyards venture?
A: Shareholders will own equity in the company that owns the wine estate land, the brand, villas and winery.
Q: Half of the Hemelzicht Vineyards shares have already been snapped up, where is the interest from?
A: Along with South Africans, investors from the UK have shown the strongest interest to date. There has also been interest from the US, Europe, 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.
Q: Are there similar investment models on the global arena? How do they compare?
A: Similar international options allow you to invest in projects within a wine business such as Winefunding.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.
Q: How will dividends be issued to shareholders?
A: 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.
Q: How long will it take until we can taste the wines?
A: We are just about to harvest small volumes of the 2021 vintage! The wine dividends will therefore be available next year, along with the new luxury accommodation.
Nadia Newton Johnson: winemaker and Hemelzicht Vineyards partner
Q: Nadia, as winemaker at Newton Johnson, please tell us what is special about the Hemel-en-Aarde valley.
A: When Aubert de Villaine presented a tasting here at Newton Johnson in 2016, he remarked that the pinot noir grape can handle dry though not hot weather conditions. The Hemel-en-Aarde is unique in this context, among the winelands of the Cape, in its close proximity and accessibility to the Great Southern Ocean below us. Nowhere else is the impact from the cold Atlantic currents from the Antarctic felt more acutely, providing the cool conditions to ripen these grapes for longer, necessary for rendering complex flavour in the wines. The Upper Hemel-en-Aarde Valley, elevated in its exposure to the ocean, encompasses the sole vineyard area in the Overberg where Precambrian granite intruded through the earth’s surface to form our soils and clays. After nearly 20 years of farming pinot noir and chardonnay in this decomposed granite soil, we have become allured in the potential to produce wines of immense purity and articulation. The texture and composition of this granite soil is diverse throughout the Upper Hemel-en-Aarde Valley, transposed into individual and elaborate expressions of the same grape. The Upper Hemel-en-Aarde Valley nurtures a sense of discovery, where the next great vineyard may be unearthed.
Q: Which varieties are going to be produced on the Hemelzicht Vineyards estate?
A: Hemelzicht Vineyards is currently planted with chardonnay, sauvignon blanc, cabernet sauvignon and shiraz. The entire property has been scrutinised for the potential of our primary focus, chardonnay and pinot noir, and we believe that some of the best vineyard sites have yet to be planted. Some of the existing vineyards will be replaced in accordance with their potential for quality, though there remains the opportunity for members to produce and enjoy smaller cuvées of the other fringe grape varieties. Truly fine examples of chardonnay and cabernet sauvignon have already been established by our direct neighbour in the top tiers of the wine world.
Q: Please tell us how Newton Johnson will be involved in this exciting venture?
A: Along with Bevan and Gordon Newton Johnson, we have been the generation to help contribute to the astronomical rise in reputation of the Upper Hemel-en-Aarde over the past 25 years. Hemelzicht Vineyards, as a concept and potential to expand our footprint in the appellation, is an irresistible opportunity to help discover and develop fine terroir and further enhance the renown of the Upper Hemel-en-Aarde. Newton Johnson will be overseeing the development and management of the vineyards and winemaking over the next ten years, at least. In time a permanent winemaker will be appointed, to be conjoined with our creativity and experience. We will also have representation in the governance of the venture.
