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.
Welcome aboard the 90m luxury yacht, built by Oceanco, and delivered in 2019. DreAMBoat was designed by Espen Oeino with Azure Naval Architects developing the naval architecture. Her A-class interior design was created by Terence Disdale.After delivering last year, the yacht was bought by Arthur Blank, when fairing and outfitting were underway. Timing had been an important factor because he wanted DreAMBoat to be ready for the summer. Arthur requested more than 100 little edits, but the only major change was the addition of a VIP suite on the owner’s deck.Arthur Blank is known as co-founder of Home Depot. His businesses include the Atlanta Falcons and Atlanta United FC. Arthur’s net worth is estimated at US$ 5.6 billion. He is said to own shares of home depot representing a value of more than US$ 3 billion. Also, the owner of DreAMBoat is an active philanthropist through his Arthur M Blank Family Foundation.The desks of DreAMBoat are connected by the glass elevator, which is located at the main deck lobby.The main saloon has many cozy zones which can be used for different purposes.The upper saloon could be used for movie nights featuring a drop-down screen. DreAMBoat has two pools: a spa pool on the sun deck and a 6m x 3.1m swimming pool on the main deck aft.The upper deck dining room can be opened up to the aft deck.Eighteen persons can accommodate the main deck dining area.The wheelhouse sits on the bridge deck, the is tucked away behind it.The yacht can accommodate 22 guests and 27 crew members. The six guest cabins are held in a warm-toned, additionally, there is an owner's area on the upper deck, with a children's cabin and another VIP owner's suite.
June 2, 2020
Royal Huisman showcases a new lightweight 46m high-performance cruiser sloop: “Nauta Reichel Pugh 151”. Nauta Design produced the exterior and interior styling, Reichel/Pugh for the yacht’s naval architecture, Rondal did carbon Panamax rig, and Royal Huisman provided their most-qualified engineering and construction skills for the optimal end result. Royal Huisman Project 405’s lightweight aluminium and carbon composite construction will present formidable competition to existing carbon yachts, whilst combining comfort with the low sound levels of aluminium yachts.The team worked with “intelligent lock-down” measures implemented in the Netherlands since mid-March 2020 and promptly adopted by Royal Huisman. These measures allow the shipyard team to continue working in strict observance of the regulations, such as the continuous monitoring of its workers’ health situation and etc.According to Jan Timmerman, CEO Royal Huisman: “It is truly an honour to work with the owners and this great expert team of designers to realize their lightweight superyacht. The team of Royal Huisman is proud that the owners and their team have selected us for this innovative lightweight construction which was cleverly developed by our in-house R&D team, backed up with over 55 years of experience with aluminium construction. This latest superyacht order confirms Royal Huisman’s adage “If you can DREAM it, we can BUILD it!”Royal Huisman Project 405 is scheduled to be delivered in 2022.
May 29, 2020
34m SX112 is the flagship of the SX crossover line by Sanlorenzo that proposes a new way of living on the sea: the barriers on board are eliminated, and the boat opens to the outside, in a close relationship with the marine context.The project design of the external lines produced by Bernardo Zuccon of Studio Zuccon International Project and interiors by Piero Lissoni, art director of the company since 2018.The key features of the project are the new stern zone which undoubtedly represents the yacht’s most iconic area. Conceived as a spacious internal beach area, it is directly connected to the outside, allowing the yachtsman to enjoy these spaces in a novel way.
May 29, 2020
Superyacht design studio Bannenberg & Rowell have released a new superyacht concept, the 43-metre Estrade. Bannenberg & Rowell describe this yacht to be designed for the soul, for relaxed and healthy living and, above all, to connect with the environment. The yacht can accommodate up to 10 guests and nine crew on board and ample space for toys.Key features include the beach club aft that folds out on both sides. Elsewhere, the cantilevered sunning deck overlooks the beach club, ensuring “positively no FOMO”, the studio said. Elsewhere, Estrade features a sundeck with a spa pool. The jet skis and tenders meanwhile are stored at the bow.
May 28, 2020
Project Mana, the third hull in Dutch yard Mulder's ThirtySix series, has been launched and ready to begin sea trials at the North Sea.ThirtySix features a bespoke modern exterior with sleek aluminium construction and a continuous window line which culminates in a contemporary plumb bow. The four-cabin version accommodates eight guests on board. Five spacious cabins onboard accommodate up to ten guests. Both the four and five-cabin layout have Pullman beds in the forward guest cabins.The saloon, dining room and bar area are located on the main deck, with floor to ceiling windows providing panoramic views. The dining experience is enhanced by the addition of a folding side balcony, which brings seascape panoramas right to the table.The sun deck above the aft deck and main saloon include generous seating, lots of sun pads, a whirlpool bathtub with room for eight and a comfy dining place.The design features the Van Oossanen patented Fast Displacement Hull Form (FDHF) to ensure comfortable sailing and fuel economy at all speeds. Twin 847 kW engines will ensure a maximum speed of 16.8 knots. The fuel consumption at economic cruising speed of 11 knots is less than 80 litres per hour.
May 28, 2020