Challenger Wine Trust (CWT) said today that the value of its vineyard properties would decline by up to nine percent, blaming an oversupply of wine flooding the market and consequently pulling down grape prices.

Currently under the management of Challenger Listed Investments Ltd, the investment fund said that an independent valuation of all its assets was being undertaken and should be completed right before the completion of the financial year.

Fund manager Nick Gill said that projected valuation slides should commence from the December 31 mark, spurred by slow downs on CWT's New Zealand and Gundagai properties.

He added that the oversupply of wine hitting the market, vineyard capacity surplus and a strong-performing Australian dollar all contributed to the softening of grape prices, which now approach the 20-year low across the industry.

Mr Gill said that the Australian wine sector is showing signs that it is en route to recovery but they are still projecting that the vineyard sector should carry some more pressure for some months ahead.

Notwithstanding, he said that "CWT would continue to respond to the difficult market conditions in the wine and vineyard sectors domestically and globally."

CWT is predicting one cent per unit distribution for the six months leading to June 30 this year, raking in total distributions of 4.25 cents per unit for the financial year, and as of 1117 AEST stapled securities in the trust fell by 17 percent or 4.5 cents to reach a 22 cents value.