Algodon Group acquires additional 2,088 acres of land!
We are pleased to announce that Algodon Group has acquired an additional 2,088 acres (845 hectares) of land directly adjacent to the existing property at Algodon Wine Estates. This land acquisition has more than doubled the size of our existing estate, from 2,050 acres (830 hectares) to 4,138 acres (1,675 hectares).
This is an exciting step for us, marking a significant expansion of our real estate holdings. The new land gives us the flexibility and space needed to expand the scope of our operations, enabling us to capitalize on the budding Argentinian real estate market.
We are considering various uses for the new land, including the development of Private Estancias, Vineyard Villas and additional estate lots. An expansion of vineyard operations and the development of supplementary agricultural revenue streams are also being considered.
Most importantly however, we view this acquisition as a long term land bank, at an opportune time when there has been a continued rise in real estate values in all of Argentina. This property is expansive, and the opportunities in potential revenues is also expansive. On the existing property we have already built an internationally recognized collection of assets that include our winery, an award-winning hotel and restaurant, a beautiful golf course and tennis center, and hundreds of acres of prime vineyards, to name just a few.
We believe that the value of the new acquisition therefore has immediately increased by merely being associated with Algodon Wine Estates, for which we have already built so much infrastructure and value.
We are also happy to share that San Rafael has recently lifted the prohibition on the digging of water wells, which we also believe may have a significant positive impact on the parcel’s value.
Argentina’s Upcoming Midterm Elections
Many of our shareholders had no doubt closely followed Argentina’s recent Senate primary election, in which former president, Cristina Fernandez de Kirchner, narrowly lost the vote for a senate seat.
Many were concerned that Fernandez, who was indicted for corruption last year, might potentially weaken Macri’s platform of reform if she had won. However, her failed attempt to win a valuable senate seat indicates that Macri’s coalition may become the country’s main political force after this year’s midterm elections on October 22nd. If successful, Macri and his pro-market policies would remain in force until 2023, and possibly longer.
American Vice President Mike Pence visited Argentina immediately following the primaries, and praised Macri’s “bold reform agenda,” saying it was a model for the region, and that “Argentina in many ways is an inspiration across this hemisphere and across the wider world.” This was a significant gesture on the part of the U.S., as Pence emphasized that “When Latin America embraces economic reforms, Latin America succeeds and so does the United States.”
Macri’s economic reforms have no doubt improved investor confidence and this seems to be resulting in a solid performance of the Merval Index, which has risen over 50% since around this time last year.