Superyacht purchases are a peculiar form of investment. Unlike land or real estate, yachts are guaranteed to depreciate in value over time. Yet, new yachts are delivered every year and our database alone holds over 7.9 billion dollars worth of yachts for sale. One might therefore ask oneself what is driving this demand for yachts.
A yacht is arguably one of the most prestigious possessions one can have and would undoubtedly turn quite a few heads at cocktail parties. Owning, as opposed to chartering, can also provide greater freedom in terms of dates and itineraries. From these points alone, one could think that purchasing a yacht is an irrational choice that has no correlation with current economics.

Data however indicates otherwise. According to a report by Boat International, 205 yachts were sold in 2010, at the height of the recession, and this number has doubled to 412 yachts sold in 2014. This seems to indicate that yacht sales are in fact highly dependent on price as are most ordinary purchases. One might therefore consider whether now is a good time to purchase a yacht.

Despite a certain recovery in the market following the subprime crisis, the market is still far from its 2006/2007-state. As one might recall, a breed of yacht flippers had emerged in the early 2000s that commissioned yachts and sold them at a profit, a few months before launch. This arbitrage opportunity emerged due to the fact that most shipyards had their order books full for up to 3-4 years and led to profits for flippers of about 15% according to the Wall Street Journal.

These days now seem like a long-gone past for most players in the industry as we've shown in our article on the economics of yachting. Whereas some shipyards are venturing into speculative builds, either borrowing money from banks or putting up their own capital, others are holding off on any construction before finding a client for the new build.

On the brokerage side of the market, yachts typically go through several stages of price reductions before eventually being sold. This process can often take 2-3 years with the final price generally being 25-30% lower than the resulting asking price. In this buyer's market dynamic, it is the serious sellers that often manage to sell their yachts faster, understanding that a buyer has several options to choose from.

The willingness of owners to sell therefore seems to be the largest force shaping the industry since, once the prices become reasonable and near market-rate, buyers are quickly located. One can however wonder why owners set unreasonable prices in the first place when the succession of price reductions seems inevitable.

Will Christie, yacht broker at Y.CO, told the Superyacht Times in an interview: "Owners are in most instances relying on brokers to advise them on a pricing strategy that achieves a quick sale at the best possible price, but it's hard not to be attracted to the agents who are promising you 20-30% more than the others. Yachts that come onto the market at an overpriced level tend to languish there for 2-3 years (sometimes more) and only sell after a number of price reductions, during which period the owner has continuing running costs and depreciation to bear, notwithstanding a fair bit of frustration! After a few price reductions, it seems that potential buyers stand back as they await the next inevitable reduction - it's a dangerous spiral."

As a result of these multi-million assets being tied up in a long selling process, shipyards and suppliers have a hard time getting clients to build new yachts according to Mr Christie. This in turn leads to more stagnation in the industry as a whole. It is not uncommon for an owner to reject the first offer that comes in and eventually sell, a few years later, at a price lower than the first buyer would have given.

To conclude, one can therefore see that there are several good opportunities on the market today through sellers that have come to realize the actual value of their yachts. Although until the industry fully recovers, if it ever happens, reasonably-priced deals should keep coming on a rolling-basis. Consequently, there are and will be yachts with inflated prices and good deals on the market at the same time.

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Privacy on-board: how to protect your superyacht from paparazzi
Security matters and finding ways to protect their assets, crew, and guests from such dangers as pirates or paparazzi, have been in focus of the yacht owners for years. Security systems deployed onboard normally depend on the owner’s profile, the assets in question and the locations a system would be operating. Increasingly, the owners order security systems that can automatically monitor, detect, track, classify and alert operators to approaching objects in the proximity of a yacht. There are some technical devices, normally deployed for better protection.When it comes to paparazzi, one of the most helpful device would be anti-drone protection. Such equipment would detect and identify commercial drones within a 20+km range, providing GPS positioning of both drone & pilot together with the drone’s speed and heading. When a real drone has been detected, the system enables creation of a 500 metre plus electronic ‘exclusion zone’ around the yacht. Once the drone approaches this zone, its control/video signals would be blocked, forcing it to land or return to operator. One of the most popular examples of anti paparazzi protection on a superyacht, is Russian billionaire Roman Abramovich chosing to install a special shield system against paparazzi on his 162.5-metre Blohm+Voss superyacht Eclipse, built in 2010.According to The Times, the device is capable of fixing the activity of the photosensitive elements on digital cameras, and disables them with a direct laser beam. The system works under both automatic and manual modes.The fourth in his private fleet, Eclipse was famously built for Russian billionaire, Roman Abramovich and the owner of Chelsea football club, as the largest yacht in the world (at that moment), a title that she held until the delivery of the 180-metre Azzam in 2013.M/Y EclipseEclipse also comes fitted with an underwater mini-boat and two helipads in case of emergencies. The initial price of the yacht was rumoured to amount to € 350 million, but additional equipment might have increased her value to € 800 million.According to Forbes interview with Johannes Pinl of superyacht privacy and protection company MARSS, nowadays onboard CCTV, access control (door locking systems) and deck mounted pressure sensors likely to ‘form the basis of most standard superyacht security packages.’These will be connected over an onboard network and managed from the bridge or a central control security room. Long-range daylight and thermal imaging cameras can have a dual function for both navigation and security use cases. Such cameras can be equivalent to military specification and are mounted on the mast to provide a long distance visual capability around a vessel.He also stresses out that the key important thing is ensuring awareness among the crew to increase reaction time and make better decisions based on a clear assessment of a situation.Meanwhile, one of the recent security devices installed by MARSS on a 100-metre plus superyacht, was NiDAR 360° degree surveillance system integrating multiple sensors to provide automated monitoring, detection, tracking and classification of objects in the vicinity of a vessel.Operating autonomously at 24/7, NiDAR tracks both known and unknown surface and air objects. Smart software algorithms automatically analyse and rank threats, triggering alerts to notify crew and security personnel as required.
Chanel launches J12 Yacht Club in New York
French high fashion house Chanel has launched its own yacht club at Shelter Island, New York. The space was arranged to celebrate the 20th anniversary of iconic J12 watch by Chanel, whose original design had been inspired by the J-Class racing yachts.Photo: Dave Kotinsky/WireImageThe area lays within a famous Sunset Beach Hotel on Long Island owned by a real estate mogul André Balazs, along with The Chiltern Firehouse in London, Chateau Marmont in Los Angeles, and The Standard hotel chain. Photo: Sam FrostThe press release states:The J 12 Yacht Club reflects a modern-day interpretation of a yacht club, as only Chanel could imagine it. From the shores of Shelter Island Sound, visitors will be immersed in Chanel's take on island living, complete with customised umbrellas, coolers, surf boards, badminton and ping pong.The area also comes fitted with a stylish games room featuring a selection of classic board games. The brand has also taken over the Sunset Beach boutique, creating a one-of-a-kind space for guests to discover the new J 12 collection. The yacht club was open to public from July 17 to July 21, 2019, while July 20 saw the celebration of the J 12's 20th anniversary with fashion celebrities on the guest list and a performance by a superstar musician Billie Eilish.Photo: Sam FrostThe high-fashion conglomerate Chanel S.A. is one of the most influential and commercially successful fashion houses in the world. With the brand value estimated at $ 9 billions, Chanel is ranked #79 in the list of World's Most Valuable Brands 2019 (Forbes). The company is privately owned by Alain and Gerard Wertheimer, grandsons of Pierre Wertheimer, who was an early business partner of Coco Chanel.
88m superyacht Project Lotus revealed by Royal Huisman
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Benetti delivers Fast 125 Series Bangadang with Rolls-Royce propulsion
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Tennis superstar Rafael Nadal orders Sunreef 80 Power yacht
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