A recent report in the FT looked at the financial health of the superyacht industry – concluding that a crucial year was ahead – with 2013 seen as a make or break year for the industry.
A picture of an industry offers big discounts in order to secure a sale with buyers urged to set realistic prices if they are serious about selling.
“We are placing an emphasis on boats that owners want to sell, and we want to know that owners are serious about that. I am not interested in asking prices. I do not make money on asking prices but on selling prices.” Nicholas Edmiston, chairman of broker Edmiston, told the paper.
However this renewed price awareness has led to a return of confidence to the industry. The difference between the unrealistic prices offered by buyers looking for a distressed bargain and the unrealistic aspirations of some owners unable to comprehend the loss in value has narrowed greatly.
Confidence in correct pricing means that quality boats are selling again and once the market begins to move the ripples spread through out the industry.
Re-fit businesses are busy across the Med as new owners sellers and buyers carry out work to re-model or re-vamp existing hulls and yachts.
Also noted in the increase in Chinese involvement in the luxury yacht market, despite limited domestic demand. Last year Shandong Heavy Industry took over Ferretti whilst recently Sunseeker was snapped up by Dalian Wanda.
The Chinese are keen to exploit these heritage brands to create a domestic demand in China, where luxury motor brands such as Rolls and Aston Martin are highly valued as symbols of social status.
The report identifies current global demand for new superyachts to be between 30-40 a year. After all you’d have to be slightly crazy to want to go through the complex and stressful process of overseeing and designing your own superyacht.
“We are dealing with tremendous egos. Why have a new yacht when there’s a fantastic selection among 1,000 used ones out there? But they want the ultimate boat. In the mind of one owner, he was the painter and we, the shipyard, were the paints and the canvas. That’s how he described it.” says Henk de Vries, chief executive of Royal de Vries, one of the two Dutch yards constructing yachts under the Feadship brand.
Due to the complex nature of the design and build process of a superyacht there is always a significant amount of time between the commissioning and delivery of the vessel. Pre-2008 global egos and optimism meant that larger and larger boats were built. All of the world’s largest 100 yachts are now over 70m and more than half of these were built in the last five years.
However the report sees this trend as unlikely to continue. In the future quality and efficiency look to be the key factors rather than just sheer size.
That’s not to say that now more megayachts will be bought. There are a number of 100m plus yachts under construction around the world and naval architect Ed Dubois reports that they are close to signing designs on a new giant 101m sloop with a 125m mast – taller than Big Ben!