Hannah Wilde Article Contributions-GPS Edition 6

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In the age where everything is documented in the social media landscape (think invasive Facebook statuses, punchy Tweets and filtered Instagram photos), people are increasingly craving excitement, exhilaration, an element of the unexpected—in short, people want an unforgettable experience, an experience to truly write home about. Capitalising on this need for adventure, hundreds of restaurants around the world have taken a very banal and everyday notion of dining out to the extreme, by providing their diners with a truly memorable experience.

Quirky restaurants are not necessarily a new concept—many eating establishments have been capitalising on their unique selling points for years, as seen with successful chains such as Hard Rock Café or TGI Fridays with their American-themed diner experiences. However, extreme restaurants take things a step further, pushing the boundaries in the most unusual and unexpected ways. Although often considered something of a ‘hidden treasure’, restaurants offering a truly thrilling and unique dining experience are not to be overlooked—there are a wide variety of restaurants operating on every single continent offering something special, so there is always something to suit every budget, inclination and risk level. This article will look at some of the world’s most weird and wonderful restaurants, oftentimes designed to test diners physically, emotionally or gastronomically.

First on the list is arguably the most physically extreme restaurant in the world, demanding from its visitors dedication and physical duress from the

outset. The Huashan Teahouse, a former temple, is situated at the southernmost summit of Mount Hua in the district of Huayin, North West China and, to paraphrase the old idiom, the adventure in this case is well and truly in the journey. For those brave enough to take the trip, an old rickety tram will take you up to the pathway where the adventure truly begins—unharnessed guests have to then tiptoe across tiny wooden planks, scale up the side of a mountain supported only by narrow toe-holes and, if that isn’t enough, then tackle one of the world’s steepest staircases to reach the top. Once you have recovered from the 3-5 hour ascent, the views from the Huashan mountain are truly spectacular, and the teahouse itself is said to serve some of the best tea in China. However, the only downside is that you then have to repeat the same journey in reverse to get back to solid ground, so this trip is not for the faint-hearted! Regardless of the incredibly dangerous expedition, this teahouse is still inundated with thousands of thrill-seekers ever year, eager to experience what has naturally been described as one of the world’s most dangerous hikes.

Another restaurant not for the tentative diner is found in the neighbouring country of Japan, in Tokyo’s Usukifugu Yamadaya restaurant. Unlike China’s mountainous tearoom, the danger here is fairly veiled. Situated in a back street of Tokyo’s Roppongi district, and ultimately disguised like a fairly substandard restaurant, the speciality of Usukifugu Yamadaya is fugu, a puffer fish renowned for containing a potent neurotoxin (hundreds of times stronger than potassium cyanide), a

A GUIDE TO EXTREME

DINING

Words : Hannah Wilde | View : Lukas Gojda

Some restaurants take things a step further, pushing the boundaries in the most unusual and unexpected ways


poison that is potentially fatal if not cooked correctly. However, nervous patrons should take comfort in the fact that you need to be fully trained and have a license to cook fugu in Japan, and research has shown that only 6 fugu-related deaths per year have been recorded between 1996 and 2006. Despite the potential lethality of fugu, it is considered somewhat of a delicacy in Japan, and so this game of culinary roulette is a must for gastronomical risk-takers.

The next physically extreme restaurant of note is in the European city of Costa Brava in Spain. Despite the name, customers frequenting the Disaster Café are lulled into a false sense of security—from the outside, the restaurant looks completely normal until you step inside, where you are greeted by staff wearing helmets and safety equipment and the food is served in heavy reinforced dishes. The reason for this soon becomes clear however, when suddenly during dinner, the whole restaurant emulates a 7.8-level earthquake. Diners never know when the promised ‘disaster’ is going to strike, but when it does, the lights go out and everything in the restaurant moves. It is safe to say that patrons of this café are advised not to don their finest clothes for this restaurant, as spilled wine and slopped food is to be expected. Strangely, demand for this restaurant is high, with reservations made up to a week in advance. The Disaster Café is perfect for thrill-seekers who love a side order of adrenaline with their meal, but it should be said that those with a nervous disposition should probably pass up this particular eatery!

Another restaurant where your Sunday best attire is not advisable is Dans Le Noir?, a restaurant chain with branches in various European cities like London and Paris. For those ill-versed in the French language, the translation of the restaurant’s name is simply ‘In the Dark’, which sums up the crux of this quirky restaurant perfectly. However, far from being just a fad, the creators of the restaurant have created a whole process that is perfectly designed to give diners the best and most exciting experience possible. To illustrate this process, the London restaurant in particular requests its customers pre-order their dishes before entering the dining room from one of three ‘secret’ menus, whereby you select either the Red, Blue or Green menu. The colours correspond to the main component of your meal—Red indicates meat, Blue means seafood, and Green ensures your meal is vegetarian. From there, you are led through to the pitch-black dining room by one of the restaurant’s servers, who are either blind or visually impaired. This decision has been explained by the creators as “a human exchange when, for once, the blind become our eyes to guide us into an intriguing new way of experiencing our environment”. Then, once seated, guests are forced to converse in complete darkness until their food arrives. The simple premise of eating in the dark is to enhance the idea that, if one of the human body’s five senses is removed, then the remaining four are heightened to compensate. So theoretically, the meal should smell and taste better without the sense of sight, which makes dining all the more exciting when you can’t see what you are eating. Naturally, dining at Dans Le Noir? is bound to be a messy affair, but is rich in experience, fine food and the chance to truly see the world through the


perspective of others.

If it is a truly sensory experience you are seeking, our next ‘restaurant’ is another must-do. As the name suggests, ‘Dinner in the Sky’, operating in over 45 major cities worldwide, straps diners into chairs around a 22-seater table and suspends them 150 feet in the air, providing unparalleled panoramic views of the city sprawled out below. Each ‘restaurant’ can hold a waiter and an entertainer, as well as a chef who cooks your meal whilst in the air. The only problem with this is you can’t guarantee the weather, but what you can guarantee is unparalleled views, a luxury meal, and an exhilarating adventure!

A very similar concept was adapted in the Netherlands by top Dutch chef Angelique Shmeineck, who since 2011 has been offering a truly unique luxury dining experience—Angelique offers 14 diners a once-in-a-lifetime experience of a stunning three-course meal, prepared and enjoyed from the comfort of a hot air balloon. Whilst not as exhilarating as a singular table suspended in mid-air, nonetheless CuliAir Sky Dining offers its guests spectacular views of the Netherlands and a luxury gastronomical experience.

From one extreme to the other, we will now take you from the clouds right the way down to the bottom of the sea at the Ithaa Undersea Restaurant in the Maldives. Often topping the list of the world’s most beautiful restaurants, Ithaa is a truly revolutionary development in extreme dining as

the world’s first and only all-glass undersea restaurant. Not one for those with a fear of confined spaces, this restaurant sits 16 feet below the surface and offers brave diners beautiful 1800 views of the reef, with stingrays, fish and even sharks swimming around you as you tuck into the restaurant’s six-course contemporary European cuisine. This restaurant is incredibly exclusive, offering only 14 tables, and the luxury fare on offer includes fois gras, quails eggs and caviar, which only adds to the experience that can only be found at Ithaa Undersea Restaurant.

However, if confined spaces, heights or extreme physical duress aren’t exactly your idea of a good time, never fear—there are plenty more restaurants for you to experience safely on ground level.

If you have a hankering for a truly unusual dining experience, the USA is definitely home to of some of the world’s most unique and exciting restaurants. First on the list is New York’s Ninja, designed to emulate a 15th century Japanese feudal village. Inside, the restaurant is full of winding passageways and dark alcoves, perfect for the waiters (all of whom are fully trained in ancient ninja principles) to creep up on unsuspecting guests. Similarly, the Safe House restaurant located some 880 miles away in Milwaulkee, Wisconsin, is a self-professed “house of espionage”, and provides its diners with an interactive and fully immersive dining experience. Guests are put through their paces from the very beginning—think passwords, spyholes, two-way mirrors, labyrinthine hidden


passageways and secret entrances. After all this excitement, no trip to Safe House is complete without trying the restaurant’s signature cocktail Spytini, which sees the cocktail mix travel through an incredible 600 feet of tubing that passes through every room in the restaurant before landing back at the bar and poured into a glass.

If you’re looking for a more ‘traditional’ American dining experience, head over to The Heart Attack Grill in Las Vegas, a satirical play on America’s culture of big portions and fast food. Gluttonous diners are given hospital gowns and invited to tuck into the restaurant’s signature Quadruple Bypass Burger (consisting of 4 beef patties and a whopping 20 slices of bacon), served by waitresses who, you may have guessed, are dressed as nurses. However, if you prefer your restaurant a bit more organic and al fresco, a visit to the controversial Clothing Optional Diner in New York is the perfect place to shed your inhibitions. As the name suggests, diners are invited to remove their clothing and dine completely naked. Looking further afield, Asia also has its fair share of unique dining establishments, hosting perhaps some of the most kooky and unconventional restaurants in the world. Starting off in Eastern Asia, perhaps the most well-known restaurant on this list is The Royal Dragon in China, a tourist trap of roller-skating waiters, zip-wiring servers and a troupe of costumed Chinese entertainers. Whilst diners tuck into one of over 1,000 pan-Asian dishes on offer, they are treated to an authentic display of dance, martial arts and

entertainment- a fast-moving show taking place over all 8.35 acres of the restaurant. However, if you’re looking for something a little more unusual, take a trip to Bangkok’s Kraton Flying Chicken restaurant where, as the name suggests, your food becomes the entertainment. In a situation that can only be seen to be believed, this restaurant sees cooked chickens set on fire, catapulted through the air, and skewered on the spiked helmets of unicycle-riding waiters and delivered to your table. But if you prefer animals of the more cuddly variety, The Kayabukiya Tavern in Japan may be the place for you. This restaurant is the home to two miniature waiters—Yat-chan and Fuku-chan, two uniformed Japanese macaque monkeys. Well known for their love of people, Yat-chan takes drink orders, whereas Fuku-chan gives diners a hot towel. Here, service with a smile is guaranteed, and the monkeys are tipped handsomely with soya beans for their trouble—Rest assured though, the monkeys are very well treated, so come and meet Yat-chan and Fuku-chan for a truly unique dining experience.

A little closer to home, Europe too offers a range of opportunities for unusual dining. One of the most surreal dining experiences is found in Volterra, Italy, with a restaurant located within an actual top-security prison. Diners at Fortezza Medicea are served by actual prison inmates who are facing no less than a seven-year sentence, so it is no real surprise that this is perhaps one of the only restaurants in the world that require guests


off at Cornwall’s Museum of Celebrity Leftovers, which is dedicated to the presentation of various leftover food articles like crusts of bread and coffee-stained napkins once belonging to the restaurant’s celebrity clientele, including Prince Charles, singer Pete Doherty and renowned photographer David Bailey.

If celebrity spotting is more your thing, a little shy of 100 miles away in Berkshire is situated another of Europe’s most interesting dining experiences, perfect for the adventurous eater. Whilst on the outside The Fat Duck restaurant looks like a standard three Michelin-star restaurant, inside is home to a true gastronomical adventure. Unsurprisingly, this restaurant is spearheaded by notorious experimental chef Heston Blumenthal, and it’s now iconic 14-course tasting menu has been known to feature such culinary fares as snail porridge, Alice in Wonderland-inspired mock turtle soup, and finished off with the likes of egg-and-bacon ice cream. This restaurant is fast becoming as famous as its head chef, with a repertoire of celebrity clientele and even its coveted status as (surprisingly!) the fastest restaurant in the United Kingdom to earn three Michelin stars.

Whatever your taste, budget or inclination, there is without a doubt a restaurant to suit you. However, this begs the question: are you brave enough to go extreme?

undertake a background check before entering. To heighten the prison experience, guests are provided with plastic cutlery, but luckily handcuffs and prison food are nowhere to be seen. Meant as a rehabilitation programme, this restaurant has since gained a reputation for delicious gourmet food and a unique atmosphere, albeit with armed guards and a strict ‘no mobile phone’ policy. Not deterred by this altogether unprecedented restaurant, diners are eager to experience a taste of prison life, as Fortezza Medicea often boasts a waiting list of up to two weeks for a reservation. However, if you want a unique prison experience sans the inmates, head to the Malmaison Hotel in Oxford, England, where this converted prison offers diners the chance to eat haute cuisine in the confines of a former prison. Customers here can rest assured—far from handcuffs, cell and inmates, the only thing this Malmaison ‘prison’ offers is luxury dining and gorgeous architectural features.

Mainland Europe has its fair share of culinary experiences for the daring diner. From Amsterdam’s Kinderkookkafe, where everything is cooked and served by children, to La Lucha Libre in France (a celebration of Mexican cuisine and wrestling, where guests can eat, drink and either watch or take part in a wrestling match in the ring in the middle of the restaurant), Europe truly has something for everyone. If apples are your thing, a trip to Pomze in Paris is a must, using 120 varieties of apples in every one of its menu items. Or, if the English seaside is something you enjoy, be sure to stop


WHAT’STHE

ALTERNATIVE?

Words : Hannah Wilde | View : Thomas Zsebok

Fine wine benefits from a vast and comprehensivemarket, but does it make for a better investment rather

than a consumable?

Wine. For many, this word invokes thoughts of an enjoyable addition to a sumptuous meal, or even a rare indulgence when one craves a little treat. But for others, wine is not just for the enjoyment of the drinker—instead, a new appreciator comes in the form of investors, as keen to collect fine wine as connoisseurs are to drink it.

Investment in fine wine is by no means a new venture. The market has been recognised as far back as the 16th century, and if you are an investor of fine wine you’d be in good company: the likes of Samuel Pepys and Thomas Jefferson themselves are known as early acquirers of luxury wine. However, not all wine can be classified as ‘fine’ and thus tradable as an investment commodity—in fact, only a tiny fraction (less than 0.1%) of the global market is deemed to be of investment quality. Additionally, only select vineyards and regions produce investment-quality wine, with the likes of Bordeaux, Rhône and Burgundy often topping the list. But why invest in wine? As well as widely appealing to oenophiles (the name given to wine aficionados), fine wine investment also works as a sound portfolio diversifier for the most seasoned and savvy investor because of its

stability, capacity for price appreciation, and a proven track record for providing a stable hedge against recession, inflation, currency devaluation and movements in financial markets. Furthermore, expensive wine has incredible longevity, as it is an appreciating asset that matures and improves with age, and so boasts long-term prospects for its investors.

What’s more, fine wine benefits from a vast and comprehensive market, with only a finite amount of top-shelf wine produced to satiate a growing demand. Because of this imbalance between finite production and almost insatiable consumer demand, it is no surprise that the price of many exclusive vintages have risen in value by more than 250% over the past decade alone. Such a limited supply further fuels both investor and buyer appetites, so from an investment standpoint the capital appreciation that can be gained by investing in a restricted (and highly sought-after) asset can oftentimes be incredibly lucrative.

Therefore, for relative novices in the profitable market of fine wine


investment, you don’t need to know everything there is to know about vineyards, vintages or grand vins—it is a fairly accessible market, espe-cially if you enlist the help of specialist wine merchants (who can come at a cost of around a 10-15% margin). Investment wines generally come in two types: matured, and en primeur. As the name suggests, the former is a wine that has enjoyed the full fermenting process and been bottled as per the age-old method of the individual winemaker. The latter, however, is a relatively new addition to the wine market, whereby investors can pur-chase wine en primeur—that is, the act of purchasing wine early before it has been matured and bottled. Naturally, this is the cheapest point to buy wine because the contents of the barrel have not yet reached maturity and the final blend and oak-ageing process has not been fully completed. However this also carries an element of risk, because the actual bottled product could turn out better or worse than the initial barrel suggests. Buying wine en primeur is not for the faint-hearted investor, since it poses a high risk-reward ratio—before the product is bottled you cannot fully guarantee its value, but on the flipside wine en primeur also has the capability to exceed expectations and yield even higher returns for the investor.

If taking risks is not your thing, never fear: Wine offers plenty of options for stable and secure returns if you invest in a tried-and-tested region. Selecting wines from prestigious regions such as Bordeaux, Burgundy, the Rhône, Champagne and Tuscany means that your money is relatively safe, since investing in produce from châteaux in any of these eminent and celebrated winemaking districts is a sure-fire way to generate excellent returns.

Arguably the top region in the world is Bordeaux, a name synonymous with producing some of the best wines in the world. Therefore unsurprisingly, wines from the Bordeaux region have continued to be the most popular for investors. The region has more than 100 châteaux which produce a number of world-renowned names, and its market has been regulated for over 150 years. Bordeaux is an incredibly transparent and engaging wine production market, with all of the region’s wines categorised into five distinct classifications. The crème de la crème of the Bordeaux market are the First Growths (containing incredible brands such as Margaux and Lafite-Rothschild), followed by Super Seconds (including Pontet-Canet and Cos d’Estrournel), then the Third, Fourth and Fifth Growths respectively. The world’s most well-known wines are produced in Bordeaux’s First Growth, with the aforementioned Margaux and Lafite-Rothschild joining ranks with Latour, Mouton-Rothschild and Haut-Brion to create the ‘blue-chips’ of the wine world. It is not surprising then that these First Growths are both investor and connoisseur favourites, especially since First Growths particularly boast stable average returns of 10-15% per annum over a long-term (5-10+ year) basis. To reaffirm the prosperity of Bordeaux fine wines, 2010 saw a bottle of 1869 Châteu Lafite-Rothschild sold at auction for a massive £144,269, one of the most expensive bottles ever sold. This is not to say that all Bordeaux wines will fetch as much, but justifiably Bordeaux has gained a firm reputation for its consistently high-quality produce and proven track record on the market, reinforcing its relative safety as an appreciating and highly sought-after asset.

Unsurprisingly, many investors look to Bordeaux because of its excellent reputation and its highly popular produce, but in recent years as the emerging wine market has matured and developed, interest in other established wine-making regions has increased. It seems that the taste of buyers and wine connoisseurs alike are maturing for regions outside of Bordeaux, and recent years have seen an interesting diversification in the secondary market. The ‘next big thing’ in the wine market is arguably found in Burgundy, with both the top red and white Burgundy wines having been known to generate some of the highest prices when sold at auction. Much like the limited production found in Bordeaux, the wines of Burgundy are delivered in tiny quantities—this in turn helps to fuel the region’s success, as their scarcity on the open market leads to an influx in demand. Burgundy is home to a number of estates that produce incredible wines, including Domaines de la Romanée, Armand Rousseaux, Leroy, Dujac, Georges Roumier and Jacques-Frédéric Nugnier to name but a few. Top-end Burgundies, because of their limited supply, have been known to generate astronomical prices for particular vintages, with a case of Henri Jaycer being known to fetch over £50,000.

However, the thing that it is important to remember when investing in wine is that, although Bordeaux and Burgundy have a proven track record of producing excellent vintages, diversification is the key for savvy wine investors. As with anything, a diverse investment portfolio is pivotal to the continued success of your investments, and this is particularly true in the


Bordeaux,France


fine wine market. A select few vintages from Bordeaux and Burgundy should form the basis of any wine portfolio, but truly seasoned wine aficionados should know to look outside the most popular regions to offer sufficient portfolio differentiation. Other regions like the Rhône Valley, various Italian regions and even unlikely producers in the USA and Australia have been known to produce wines strong enough to command high prices and garner an excellent reputation in the wine world. But then, this poses the question—how do I know which wine to invest in?

In this instance, the simple answer is to listen to the expert. For those not fluent in the language of fine wine, Robert Parker Jr. is a renowned wine critic and self-confessed oenophile who has singlehandedly revolutionised the fine wine market. Having developed a stringent ‘100 point rating system’ known unsurprisingly as The Parker System, Parker himself visits each château in the region and tastes their current en primeur offerings, then rates each vintage out of 100. Unlike most landscapes like film or music, where a cacophony of voices and opinions are rarely ever harmonious, in the wine world Parker is the singular authoritative voice—his rating is used throughout the industry to dictate price and quality. Parker’s opinion is so highly regarded in the wine community that a study has shown that ‘The Parker Effect’ has been known to influence the value of a wine by on average 15%. A classic example of this was when Parker awarded a perfect 100 score to a 2009 Pontet-Canet from Bordeaux, its price rose from £1,100 to £1,800 literally

overnight. Therefore, novice wine investors should always look to Mr Parker for advice on which wines to invest in, as his scores are an excellent benchmark to measure current and future success of the existing in-demand wines.

In addition to the expertise of Robert Parker Jr., investors in the fine wine market also have other invaluable resources at their fingertips to assess where next to invest. London International Vintners Exchange, often referred to by the acronym Liv-ex, is an online trading platform (similar to those seen on Wall Street) that provides a good indicator for private investors to check the prices on virtually all fine wines on the market. Similarly, website Wineowners.com is another resource perfectly placed to help investors keep track of their wine investments, as well as allowing them to access wine information and prices, and even giving suggestions on when certain wines are at their most opportune for drinking.

Unsurprisingly for such a luxury asset, experts have suggested that to build up a diversified portfolio of high-yielding fine wines, investors may initially have to be willing to spend in the tens of thousands. Furthermore, wine investment is a long-term strategy, meaning that investors are agreeing to lock away their assets for at least 5-10 years before seeing any feasible financial returns. However, the general consensus for wine investment is that fine wine demands investors to speculate in order to accumulate, so any investor serious in using wine as a strategy for wealth accumulation


must be willing to spend money to make money. So just what does a typical wine portfolio look like? Like the idiom ‘how long is a piece of string’, a wine investment portfolio can take on any capacity you want, depending on factors like available capital and what the investor would like their assets to yield. But for illustrative purposes, Vin-X, a leading wine investment company, have shown what a typical portfolio looks like with a starting budget of £10,000 and £25,000 respectively.

A £10,000 budget sounds like a substantial sum of money, but in the wine world it is just a drop in the ocean. A relatively safe investment portfolio with a £10,000 starting budget would limit investors to the region of Bordeaux, investing in two First Growths (one case of Château Margaux and one of Châteaux Lafite-Rothschild) and one Bordeaux Super Second, in the form of a Château Pontet-Canet. However, a £25,000 starting budget allows for a more diversified portfolio, with three First Growths (Margaux, Lafite-Rothschild and Mouton-Rothschild), a Second Growth through Cos d’Estrournel, a Bordeaux Right Bank (Ch. Cheval Blanc), a Champagne vin-tage (Dom Pérignon Rosé) and a Rhône (Guigal La Mouline). Although this is just a guideline, as you can see the more starting capital you have for your wine portfolio, the more diversity you can achieve without compromising your returns.

Once you have selected your wines, the next thing to remember with wine investment is the ancillary costs you will accrue along the way.

Unlike stocks and shares, fine wine is a tangible asset which takes maintenance to ensure it maintains its worth. Any wine connoisseur worth their salt will know that with fine wine in particular, two factors are of the upmost importance: proving the wine’s provenance, and ensuring that it has been correctly stored. Intrinsically linked, these two factors can guarantee the maximum investment returns when the wine is ready to be sold.

The provenance of the wine (that is, its history of purchase and storage transactions) is pivotal to buyers of fine wine because they want to ensure that the bottles have not been in any way tampered with, and thus that the content is at its highest quality. In order to ensure complete transparency in the wine’s provenance, its storage is equally important—it is advisable that all fine wine, particularly those used as investment assets, are stored professionally in a specialist temperature-controlled bonded warehouse. Keeping the wine in storage has a number of advantages, not least ensuring the bottles’ contents are kept at the ideal temperature and humidity. Furthermore, a storage facility not only preserves the wine itself but also its status as a tradable commodity, since buyers will not pay top dollar for a wine that they believe may have been compromised. Although there is a minute cost attached to keeping your wine in storage (which is around £15 per case), placing your wine in a bonded warehouse in the UK means that the wine is held ‘in bond’, therefore making it free of duty and VAT tax. Additionally, wine is

Private wine merchant,Bordeaux


pigeonholed as a ‘perishable item’ in the UK, so investors of fine wine are also exempt from Capital Gains Tax, as well as the tax benefits of holding wine in professional storage. But when considering ancillary costs, investors cannot forget expenses like insurance, shipping costs and handling/administration costs, so ensure to factor in these one-off costs when considering investing in wine.

Ease of market penetration, generally excellent investment returns, relatively low start-up costs and selected tax benefits, mean that it should come as no surprise that wine investment has gone from strength to strength in the past decade. To reaffirm the market’s success, Liv-ex has measured a price growth of fine wines of 150% over the past 10 years. Yet this is expected to be just the beginning. It has been predicted that the global consumption growth rate is expected to be 6.17% over the next 5 years, so not only is the price of fine wine increasing, demand is skyrocketing too. From this perspective then, it looks like there has never been a better time to invest in the fine wine market. Industry experts have long since vouched for the inclusion of wine in any investment portfolio as a sound (and oftentimes financially viable) diversifier, with professionals citing that collectible assets should comprise between 3-8% of a typical investor portfolio.

Additionally, as well as being viewed as a financially viable investment strategy, fine wine investment does have an element of the fun factor about it—it is not for nothing that wine has been named a ‘passion investment’. Not surprisingly, Knight Frank’s 2013 Wealth Report indicated that fine wine was considered in the top three investments of passion, alongside fine art and watches, as investment in wine by high net worth individuals increased 10% on average in 2012. Experts too are increasingly enamoured with this asset class, which is growing stronger year-on-year. Fine wine is a luxury product that many aspire to own, consume and know more about, with Richard Taffler, Professor of Finance at Warwick Business School attesting: “Passion assets are perceived as making powerful statements about their personal values, characteristics and expertise of their owners and how they want to be seen”. For many, fine wine suggests luxury, prestige and expense, which only further enamours investors to the fine wine market. Sara Guiducci, a wine expert at Berry Bros. & Rudd even admits: “There is an inherent enjoyment factor with wine collecting”.

Although a lot can be said for the benefits of investing in fine wine, it has to be said that, like all investments, assets like wine do come with some risks too. The wine market, whilst relatively stable and trading on its high buyer demand cannot be wholly predictable—like wines en primeur, vin-tages that hypothetically should yield high returns sometimes don’t, but you simply cannot predict the success of the wine until it goes to market.

So from an investor perspective, it is hard to quantify what will work and what will not. Of course though, as with anything, you can make an educated guess on what will yield good returns, either capitalising on the recommendations of experts or looking back at historical data of which regions have generated good vintages in the past. As previously mentioned, wines produced in tried-and-tested regions like Bordeaux are always generally a safer bet, but it does have to be said that even the mighty Bordeaux wines are also susceptible to their off-seasons. Whilst Bordeaux should form the basis of most wine investors’ portfolios (de-mand means that it will always get sold, as it can always be traded on its great name and even greater reputation), but at what margin is somewhat of a risk in a market that cannot always guarantee consistent prices.

Additionally, fine wine is not like other tangible assets. Like property (where exactly what you see is what you get), wine has a number of factors that affect its sellable status, from climate and the age of the vines, down to the genetics of the grape and the soil used by each particular château. Therefore experts have advised that investors should restrict their holding in fine wine to no more than 25% of their overall investment portfolio.

After all is said and done, fine wine in theory makes for a good and financially sound investment choice—the truly great thing about investing in a tangible asset is that if one particular wine doesn’t yield the returns you were expecting, you can always drink the negative equity. From this mindset, your asset is never truly wasted, which is one of the many positives of investing in a ‘passion investment’. To paraphrase top wine investment company Cult Wines “equities can go bust and bonds can default, but a bottle of Mouton Rothschild will always be a bottle of Mouton Rothschild”.

Private wine merchant,Bordeaux


Q

Words : Hannah Wilde

It’s time for GPS to answer some of our readersmost pressing questions

Q. I am thinking of investing in a property in Manchester, England, but as I live in the USA it is not possible for me to visit the site—Can I still invest blind?

A. Yes, you can invest in property in any country without having visited the site before purchase, but it is always advisable to do your research in your chosen country before you invest. If you can’t visit the site personally, be sure that you are familiar with the area you are investing in, and ensure that you use a reputable property investment company who have a proven track record producing high-yielding stock in the city that you are looking to invest in. Any questions you have should be answered by a property consultant, who is there to guide you through your investment process, especially if you cannot visit the property personally.

Q. When considering which properties to invest in, should I be concentrating more on yield or capital growth?

A. Both of these aspects are very important in property investment—yields are the amount of rental income you receive from your property less any expenditure, whereas capital growth (or capital appreciation) is the increase in price between when you purchased your property and when you are looking to sell. Yields are a short-to medium-term return that you receive every month throughout the lifecycle of your property, whereas capital growth is a long-term return that accumulates over time that you can only access when you sell your property. The perfect investment should give you both competitive yields throughout your investment and capital growth in the long-term when you sell—the best way to ensure that you get both of these returns is choosing an investment in a popular location, so you can be sure of both rental demand and eventual house price rises.

Q. I am looking to invest for the first time but I don’t have my own solici-tor, will this be a problem?

A. Whilst you are always free to use your own solicitor when exchanging

&A


developments but still yield excellent returns on investment because of their high demand.

Q. Can I use my pension to invest?

A. Yes. The UK pension landscape has changed as of April 2015 to allow those nearing retirement age to release equity from their pension without having to buy an annuity. UK residents over the age of 55 can release 25% of their pension fund tax-free, with the remaining lump sum taxable at the pension-holder’s marginal rate of income tax. Because of these changes in regulations, many pensioners are looking to the lucrative buy-to-let market to further invest their pension, but it is advisable to speak to a financial advisor before withdrawing any money from a regulated pension fund to invest in property.

contracts on a property investment, most reputable investment companies offer recommended solicitors that you can utilise to finalise your paperwork. Solicitors personally recommended by your investment agent are generally more familiar with the procedures of buy-to-let legalities, so they are better placed to process your investment in the quickest possible timeframe.

Q. Is it true that the more you invest, the more returns you gain?

A. Not necessarily. With property investment, the returns you are expected to receive depend on a number of factors including location and condition of the property. If you choose your investment carefully and are sure that your property is in excellent condition and in a highly in-demand location, you can generally be sure that your property will always offer good returns. For example, in the UK market particularly, the majority of student accommodation developments are significantly cheaper than residential

Q. What are the differences between buying a normal residential property to live in (e.g. my house) and an investment property?

A. Buying a property will be one of the major investments in your life. You will always want to ensure that the property is good value for money; that it is in the right location, that it’s structurally sound; that the finances are in order; that the lawyers are happy with it.

When you buy a property for investment purposes however, you will be driven by slightly different factors to a dwelling for you and your family to live in. You may not even have seen the property due to its distance from you, if so, you need to be able to trust the selling agents as well as the developers. Your main priorities will normally be to get a good return, over and above a bank deposit account, competent management of the tenant and the property; and a secure knowledge that you can exit when you want to.

If you are looking for a guaranteed yield period, then you will looking for the best investment scheme, having applied the factors outlined above, in particular the credentials of the agent and the solicitor. Some deals look too good to be true, you will want to be satisfied that the agent has played ‘devil’s advocate’ and vetted the financials and the status of the developers themselves and can still support it.

ASK THE EXPERT

When you get the paperwork from your solicitor, you will find that it is bulky and probably hard to understand – you will need to have the confidence that your solicitor has been through it all with a fine tooth comb and is happy with recommending it to you. A typical investment scheme purchase is far more complex than a conventional buy to let, and requires specialist lawyers to handle it. Their job will be to summarise the complexities of the title into plain, simple English in as short a format as possible so that you can understand at a glance the points you need to know.

You will be under time pressure to exchange and will want your solicitor to be efficient, responsive and be mindful of the timescale. If you have concerns and need to raise questions, you will expect a prompt and full response from a seasoned professional. You will of course expect any deal you have done with the agents to be enshrined in the legal paperwork.

Some deals have exit strategies, called ‘Pre-emptions’, ‘Call Options’ or ‘Put Options’. Again you will need to know exactly what these entail so you can address any possible downside.

In recent years, investment scheme purchases have been increasingly popular and have been a good investment for many buyers. The key is trust; trust the competence of your agent, the developers and your lawyers and you will have the best possible chance of making good money with a secure exit.

*These questions and answers are provided for general information only and may not be completely accurate in every circumstance.

Hannah Wilde Article Contributions-GPS Edition 6

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Transcript of Hannah Wilde Article Contributions-GPS Edition 6