Berths boom as super-rich rekindle love affair with high-sea luxury
The world’s super-rich are returning to the high seas, with the number of luxury yacht sales hitting their highest level since the financial crisis after a spike in demand from American and Russian tycoons.
Superyachts – pleasure boats more than 24 metres in length – have been slower than other sectors of the luxury goods market to bounce back from the financial meltdown in 2008.
But demand from international billionaires has started to pick up over the past 18 months as sellers become more realistic on price, according to yacht makers and brokers.
The longest vessel to hit the sea so far in 2014 is Italian shipbuilder Fincantieri’s 140m Victory, the ninth-biggest in the all-time list of megayachts. The boat is spread over seven decks and is said to have six pools up to 8m in length as well as a floodable internal garage for its “tender” – a small boat that ferries passengers to and from shore.
“Buyers are more sensible now [and] there’s a general move towards less is more. People are going for best quality boats rather than just the biggest boat,” said Chris Cecil-Wright, a yacht broker for 20 years.
Even so, a typical superyacht can still command a price in excess of $150m and boast several gymnasiums and swimming pools, as well as a so-called hydraulic swim platform, or “beach club”, where children can pretend they are at the beach.
There were 221 sales of superyachts in the first half of 2014, a rise of almost a third from the same period a year ago, according to figures from Boat International Media. That represents a 66 per cent rise from the 74 yachts sold in the first half of 2009, the bottom of the market.
Separate figures show the new-build superyacht market is also picking up. According to Superyacht Intelligence, there are 360 yachts being built this year, a number which is expected to rise to 411 – the same level as in 2013. That is still well below the 2008 peak, when there was an order book of 587 yachts.
One broking company, Fraser Yachts, this week said it had sold its fifth yacht in just 10 days during the summer period, which is normally a quiet time for yacht sales. Edmiston, a UK-based luxury yacht broker, sold five yachts in five weeks during June.
Phillip Holden of Bluewater, a France-based brokerage, said sales were up in all areas at his company. “We are moving ahead of pre-recession numbers and forecast good growth over the latter half of 2014.”
While the number of sales has increased over the past year, many in the industry point out that values still remain far-below pre-crisis levels.
The improved outlook will come as a relief to yachtmakers, many of whom were almost crippled by the financial crisis. Lots of companies have been acquired by new – often Chinese – buyers in recent years.
Last year, Dalian Wanda Group, China’s largest commercial property and entertainment conglomerate by assets, bought 91.8 per cent of Sunseeker from its Irish private equity owner FL Partners in a £300m deal. It follows the purchase by Shandong Heavy Industry of luxury yachtmaker Ferretti in 2012.
A re-emergence of wealthy American buyers, who have traditionally been the biggest nationality of buyers, has helped boost the market.
Christos Livadas, founder and chief executive of NISI Yachts, a European luxury yacht builder, said the US pre-owned market is more or less at the same activity range as pre-crisis levels. However, European buyers have yet to return and the outbreak of the conflict in Ukraine has seen some Russian buyers disappear.
But despite China being touted as the next big growth market for yachts for the past two decades, the lack of infrastructure, such as marinas, coupled with restriction on inland migration has stifled appetite.
According to Juliet Benning, editor of Superyacht Business, late autumn is traditionally the period when many deals are struck after the industry shows at Monaco Yacht Show in September and Fort Lauderdale the following month.
However, many in the industry say superyacht sales are unlikely to reach the heady heights of before the financial crisis. “The recession was so deep that we may never see again those halcyon days,” said Bob Saxon, president of the International Yacht Collection.