Metrics for the superyacht market are trending up, with sales and charter revenue up across most brokerage firms in 2019. Yet, owners and buyers are getting increasingly cautious, bracing for an economic slowdown. With yachting still far off its 2008 heights, anxiety grows over whether the sector can sustain another crisis.
A decade ago, the yachting market lost half its turnover. Sales plummeted as American and European markets tumbled, pressuring owners to sell and buyers to hold off, resulting in a drop of nearly 40% in brokerage yacht prices. Abandoned new builds and rare new orders lead to yard collapses that rippled throughout the industry.
Figures now show the market has recovered only 56% of what it lost, before inflation, which puts it at less than half of previous volumes.
Owners and buyers alike are now becoming increasingly cautious as signals of a possible economic slowdown are multiplying. US Government bonds clearly indicate this anxiety in the market with 3-month yields at 2.27% and 10-year yields at 2.1%, an inversion that so far only occurred ahead of a recession.
Indicators of anxiety in yachting are also clear. Speculation builds have returned in the past 18 months, with several small to midsize yards increasingly financing the construction of their own yachts in the hope of finding a buyer along the way. The last time the market saw this at a significant scale was in 2008.
Several new builds over 70-meters have now been sold for more than their construction costs. Another throwback to 2008 when yacht flipping hit scale and completed yachts were selling at 15 to 20% premiums over new build orders.
Ferretti Group, the Italian yacht building conglomerate, is now thinking of going public according to Reuters. The last time the group considered such a move was in 2008.
As the market grows increasingly reminiscent of 2008, some industry players have started heading for the exits, providing an interesting opportunity for capitalists. Whilst M&A talks across yachting have skyrocketed in volume in the past 12 months, some deals have already been closed.
US broker MarineMax acquired Fraser Yachts, a leading brokerage previously owned by the Azimut-Benetti Group, leaving several brokerages still on the market for consolidation. Dutch yacht builder Moonen has also disclosed it is bringing in a new investor, whereas Wider Yachts was acquired by a group involving Zepter, owner of the 50-meter yacht Joy Me.
Global Yachting Group, which went public in 2017 with a market cap of over £50 million, now trades at half that market cap as traders remain skeptical of yachting's performance in the event of a new recession.
Recessions in itself are a normal component of any open markets, cyclical in their nature. Yachting, however, will cruise in unchartered territory as the sector is still far off from having recovered from its 2008 levels and lacks the required capital to sustain a new correction. Despite the recent uptick, many yachting firms remain unprofitable.
A slowdown could also equal opportunity for larger players looking to expand their market share. Combined, the 10 largest yards already account for over 60% of active new builds. History has shown scale and efficiency were amongst the rare factors that could make a yachting organization profitable, even in a recession.
Even if it were to avoid a slowdown, yachting still seems to be poised for deep changes. The private aviation market over the past decade has seen commissions for brokerages rapidly decrease with a liberalization of information and the entry of tech companies.
The latest of which, Central Jets, now lets users subscribe for €199/month and charter any jet direct from its owners with the platform taking only a 3% processing fee, a steep discount from the 50% margins traditional brokers used to charge.
In aviation, the advent of such business models eradicated a large part of small traditional brokerages and slashed earnings for larger groups, handing back savings to the end users. Whilst yachting is still in its early days of seeing such models come in, a restructuring of current 20% charter and 10% sales fees could be hard to process for most organizations.
Italian shipyard Cantiere delle Marche an Ancona has launched its newest semi-custom yacht design named EXP42 concept. This is already the second launch of the Ancona-based shipyard during the summer, after the recent one of its latest 42-metre full-custom motor yacht Crowbridge in the middle of June.With the goal of providing a balance between comfort and reliability in mind, the EXP42 is able to venture through roughest weather to remote locations. The new concept perfectly summarizes all features and characteristics of the series she belongs to.Vasco Buonpensiere, CdM’s Sales and Marketing Director said:An explorer yacht isn’t about its shape, it’s about its reliability, its range, its storage capacity, and its ability to face any weather condition in comfort and safety. We build cool explorer yachts, period. With an explorer yacht and a contemporary design, you have the best of the two worlds: you can cruise around the world comfortably/safely and in style. On the contrary, with a white yacht dressed like an explorer yacht (like many we see, lately), you just have a white yacht and your cruising lifestyle doesn’t change at all...The yacht was designed by Francesco Paszkowski and will feature a steel hull and light aluminium superstructure. The interior layout can be highly customized according to the owner’s needs. There ate a few options including a six guest cabins version (GA_1), including four VIP cabins on the main deck and two guest suites from the lower deck.There is a tender and Jet Skis garage on the main deck, which can be converted into a gym.
July 7, 2020
Tankoa Yachts has revealed the smallest superyacht in the fleet, but the boat still appears mighty. The 45m yacht can hold up with other mega yachts coming with incredible interiors to match.The cruiser under the name T450 was designed by Rome-based Giorgio M.Cassetta and has a steel hull with aluminum superstructure. The near-vertical bow and sleek exterior lines give her an elegant look, however, her most impressive features are on board.Giuseppe Mazza, Tankoa sales manager commented:Building on the extraordinary success of our 50-metre platform with Bintador and Vertige already delivered and two more in build, the T450 confirms Tankoa’s drive to build yachts below 500GT that are designed with a big boat mentality and quality.This new 45-metre model has been designed to provide maximum flexibility, and in terms of interior and exterior space, it feels like a much larger vessel.T450 offers accommodation for a total of 12 guests, which is unusual for a vessel of her size, in six staterooms, including a VIP suite on the main deck, an owner’s stateroom, and four ensuite cabins on the lower deck.Owners can decide to place a pool on the sundeck with its sunbeds and its shaded dining area, forward bar, and sofas with a day head. The bridge decks on the other side offer al fresco dining and an impressive outside sky lounge, with another outside social area on the foredeck.Cassetta said in a press release:The yacht packs some amazing real estate and amenities while presenting an elegant styling that is intentionally free of any useless decoration. The interior design enjoys ample uninterrupted spaces, warmed by the usage of marine materials and earthy hues. The construction criteria and rich specification will make the T450 a truly unique offer in this size range.
July 7, 2020
Amsterdam studio Isaac Burrough Design has revealed a 110-metre superyacht concept. Inspired by Māori guardian of the ocean ‘Kiwa’, this motor yacht concept was named after it.The studio, located in The Netherlands, is headed up by designer Isaac Burrough, who has a life-long passion for yachting. Since the launch of his own design studio in 2018, Burrough released five concepts to the public, most of them being below 60m, until now.Burrough said about the project: The intention for Kiwa was to design a yacht that is both modern and elegant. Her sleek silhouette combined with curvaceous surfaces gives grace despite her exploration capabilities. A yacht that will look sophisticated whether cruising the Mediterranean or the ArcticAccording to Burrough, the Kiwa concept "reimagines sustainable seafaring" because of its hybrid propulsion package, more than 200 m2 of solar panels and a low volume to length hull.It is impossible not to notice such amazing exterior highlight of the vessel, as the glass-bottom pool that forms the centrepiece on the main deck aft. Across 175 square metres of storage space guest toys and tenders, including two guest tenders of 12 and 7 metres as well as two crew tenders of 7 metres are included. The forward helicopter pad is made for a H145 helicopter. In total 14 guests and 29 crew members can be accommodated onboard.
July 7, 2020
Maiora Yachts, a member of Gruppo Fipa recently has launched its newest model, the Maiora 35 Exuma. Like the boat name mentions, this vessel is capable of a top speed of 35 knots and a cruising speed of 28-30 knots. Exuma is powered by CAT C32 Acert 1925hp engines and has a range of 1,100 nautical miles and fuel capacity of 22,000 litres. Francesco Guidetti, founder and President of Gruppo Fipa commented:With the new Maiora 35 Exuma we upgraded to another level of motor yachts, conceived for expert shipowners and for their own specific requests. The high windows, combined with low furniture, allow the guests to enjoy a continuous view towards the seaThe owner is a repeat client and enthusiastic customer of our shipyard, who shares our values. He actively took part in the realization of this new additional model asking for a bright design, gained with the union of smooth lines and stronger details, highlighting a sophisticated and classy mood. The last and more exclusive touch is a full-beam aft staircase which gives the guests a breath-taking sea sight from the inside. This is what you feel when you are on board: just being one with the outsideThe 35.1-metre superyacht has distinctive external lines for an immediate family feeling, but constructive choices and tricks that make Maiora 35 Exuma unique and distinguished. The Interior, which is created to make the most of space, to capture natural light and enjoy the atmosphere of the sea, offers accommodation for a total of 11 guests. You can see walnut, wengè, oak wood in the living zones, with grey and black in the galley. The main salon was designed to have no barriers and makes life onboard incredible.Straight bow, fully open stern, and waterjet propulsion are just some of the innovations of this avant-garde project. The superyacht is promised to be delivered this month, and she will first cruise the Mediterranean Sea before heading to the Bahamas.
July 6, 2020
One of the largest yachts, which have ever been built in the UK, Samar has been recently seen in Malta. The 77-metre superyacht was built by Devonport Yachts in 2006. With a beam of 0.013 m and a draft of 0.04 m, she has a steel hull and aluminium superstructure. This adds up to a gross tonnage of 2159 tons. She is powered by engines giving her a maximum speed of 17 knots and a cruising speed of 14 knots.The motor yacht can accommodate 12 guests in 7 cabins. She has an opulent interior, designed by Joe Thome. Samar’s exterior design was created by H2 Yacht Design & Nick Meyers.Samar has an impressive pool, a gym, a cinema, and several bar areas. The superyacht features several toys, including a Mini Cooper and a Bell 407 helicopter.Samar approximately costs $100 million and is owned by Kuwaiti billionaire Kutayba Alghanim.
July 6, 2020