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.
Innovations in megayacht eco-design seem endless. One of the first designers to take a step forward in this direction in 2020 was a marine engineer, Philip Briand. From the headquarters of his studio in London, he presents the concept of sailing in superyachts, which puts zero-emission navigation at the center of all decisions.The latest concept from the French designer appeared after he was motivated to create a “zero-emission yacht”. This is the second concept from the new Briand family of self-contained yachts, which is on the heels of the 90-meter SY300. Briand previously described the SY200 as the "younger sister" of the SY300.The SY200 will travel in two ways: boat sails and underwater turbines, with which it will collect electricity for the 20 batteries that it will carry in its hold.According to Briand, the length of the yacht is 75 meters, and the sail is 2,000 meters, it generates more than 2,000 kW at maximum speed. To do this, he designed a helmet inspired by high-class, shorter sailboats. In particular, he emphasizes his inverted nose and central glass capsule.Ketch is equipped with a carbon fiber mast and rigging, as well as the same modern hull and upturned nose as the SY 300. Briand estimates the power of the yacht is 500 kW when sailing at a speed of 15 knots and 200 kW at a power of 12 knots."I believe we need to embrace ‘lateral thinking’ when it comes to the future of sailing yacht design. We want to work alongside owners to create the perfect renewable energy machine, using only wind, water and solar energy to run the yacht and provide an exceptional experience of peace on board and exploration of the sea.” - Briand said.At speeds of 15 and 12 knots, he expects to add 500 kW and 200 kW, respectively, which will allow him to generate enough energy on board to enjoy her 12 cabins.On board the vessel can accommodate up to 10 guests. Master-suite leads to a large terrace with a jacuzzi and four large guest cabins. The dining table with 16 seats in the cab is protected from the sun and boasts panoramic views.
January 24, 2020
Richard Matthews, original founder of Oyster Yachts, has returned to its board as a non-executive director. This follows Richard Hadida buying the company in 2018. Matthews had founded the sailing yacht manufacturer back in 1973.Oyster Yachts built its first 32ft sailing boat in 1973. From there it gradually extended its range of sailing yachts finding its sweet spot in 56ft to 125ft units designed by Robert Humphreys. In 2008 the company was sold to private equity firm Balmoral Capital for £70 million, before the firm disposed of it to HTP Investments for £15 million in 2012.Following a failure of the internal hull structure on Polina Star III, an Oyster 825 model, which led to the yacht sinking in 2015. This led to a recall of 4 other units and a dent in the builder's cash flow despite a £83 million order book in 2017. The following year, the company went into administration, before being purchased by Richard Hadida.Hadida is mostly known for founding Evolution Gaming, a company that powers most online casino games and currently trades on the Swedish stock market with a market cap of near €5 billion. His fried, yacht owner and automotive mogul Eddie Jordan was formerly also involved in the takeover bid with Oyster but later backed out."It is hugely important to me personally that the founder of the brand [Richard Matthews] I hold so close to my heart has given it his seal of approval by joining our board." Hadida explained. "Having restored the company to its former glory with the support of a fantastic team – from talented craftsmen to dedicated management – this feels like confirmation that Oyster is once again synonymous with quality and excellence, just as it was when Richard founded it back in 1973".
January 24, 2020
Yesterday, at the Boot exhibition in Dusseldorf, Il Cantiere del Pardo presented the new Grand Soleil 44 Performance. This is a project of Matteo Polly, the best designer in the offshore sector, rated, which is designed to become a reference boat in the racing sector ORC. The new Cantiere del Pardo challenge is called Grand Soleil 44. To win this bid, the shipyard turned to a designer who was best able to interpret the concept of a sports building on racetracks around the world in recent years. This new 44-foot kit complements the Grand Soleil Yachts Performance range, designed for more sporty owners looking for a high-performance boat that can deliver results even in a regatta, located between the GS 34, GS 48 and GS 58. As already noted on board the Grand Soleil 48, the GS 44 will also be available in two versions: the layout will be more suitable for cruising, with a different layout of the sail and deck plan to simplify maneuvers, the other will be more Race for the best on the regatta. Style and elegance complement the DNA of this new 44-foot footer, which feels a family of other models in this line. Despite the very light and sporty body, the liveliness of the interior is surprising in how much volume you can use and perceive. Following the trends of the latest Grand Soleil Performance models, even on 44-foot deck places, both for racing and for enjoying a boat on a cruise, they are truly remarkable, the dimensions of the cabin are significantly increased compared to all previous models. Among the distinguishing characteristics of the boat is the location of the mast in a rather opposite direction, which will increase the sail area for bow sails in order to maximize the characteristics taking into account the average Mediterranean conditions. A choice that also allowed the cabin layout to be promoted and thus have a larger cabin than previous models. The interior layout includes three cabins and two bathrooms. The spaces below the deck have a generous beam that offers large and comfortable volumes: the kitchen is located on the left, the dining room consists of a comfortable sofa with a dining table in the center, which can accommodate up to 8 persons. Master-suite, with a comfortable double bed, a sofa and a private bathroom, is really large for a 44-foot case with a sporty character. To make the interior even more comfortable, there is a wonderful natural brightness that penetrates through the various windows of the hull and onto the deck.
January 23, 2020
Turkish shipyard Numarine has announced the sale of 5 yachts from its XP series, bringing the total in the series up to 10. Four of these will be 26-meters in length and one 32-meters."These achievements indicate the relevance and popularity of the series" commented Numarine founder Omer Malaz. "We are very pleased that five more international customers will be able to experience what high quality and impeccable Numarine style are."All built on the same platform with identical layouts, the four 26XP yachts will feature a spacious flybridge, a main salon on the main deck and 4 guest cabins on the lower deck. Interior designs and finishes will be customised to the owner's tastes.The only substantial difference between the units will be the hulls, with one of them being semi-displacement with MAN engines of 1,200hp each, whilst the remaining ones will be displacement units with engines of 560-800hp each also manufactured by MAN.The 26XP and 32XP series were both designed by Can Yalman with naval architecture by Umberto Tagliavini. The Numarine 32XP model was being marketed at just under €9.3 million whilst the 26XP was asking just over €3.8 million.
January 23, 2020
Abeking & Rasmussen have confirmed the launch of their new 68-meter superyacht, Soaring. The yacht had emerged out of her shed earlier this week and has now been lowered into the water for the first time this morning.Designed by Focus Yacht Design and project managed by Superyacht Technical Services, the yacht, which is set to become available for charter in the summer 2020, comes in at a size of over 1,500 GT.Soaring's upper deck features its master suite with a private owner's aft deck and a library. The yacht's remaining 5 guest cabins will be located on the main deck and catered to by a crew of 17.
January 18, 2020