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MARKET INTEL 2016
MARKET INTEL 2016

MARKET INTEL 2016

Monday, 14th March 2016

THE MARKET

It has been an interesting six months since the Monaco Yacht Show in September 2015. Volatility has returned to the global financial markets and one would expect that it would have a knock on effect on the global yacht market. Interestingly, the impact has not been so severe. From 1st September 2014 to 1st March 2015, a period of overall financial market growth, we saw global sales of 225 yachts of over 24m. During the same six month period ending on the 1st March this year there have been 222 sales over 24m. This would illustrate that the market hassomewhat plateaued. 

However, when we take a closer look at what is selling it tells a different story. There has been a 28.5% increase in the number of yachts over 40m being sold – this is a sizeable increase but not quite as incredible as the consecutive 100% increases in the number of 50m-60m, 60m-70m and 70m+ yachts sold. 

The most prolific market movers are still the Americans, making full use of both the strength of the USD relative to the Euro and the stronger overall recovery of their markets in general. That said, the ever-growing Chinese market was responsible for two of the largest open market acquisitions of the last six months – the 60.60m Amels, EVENT (asking EUR 71,000,000) and the 60.00m Lurssen ARKLEY (asking EUR 55,500,000). On the closed market there was an extremely large transaction between a prolific American owner and a Hong Kong based client; the yacht was in excess of 110m. When it comes to the Giga-yachts (100m+) the transactions tend to happen very much off market. At the time of writing we have several yachts over 100m for sale off market and would be delighted to discuss them further should they be of interest.

The infrastructure for yachting is developing quickly in Asia and we anticipate this segment to go from strength to strength. The marinas of the Shanghai Yacht Club are developing as I write this and they will soon need yachts to fill these spaces. The acquisition of Sunseeker by the China based Wanda Group in 2013 will only compound growth. As they start to manufacture their own brand of small, fast boats this will lead to the acceleration in the organic growth of the yachting community within China. Currently the government applies an additional 40% tax on yacht importation. Whilst this has not stopped larger acquisitions by some Chinese buyers, it has greatly affected the emerging middle class buyers. 

In terms of what is for sale there are two 70m+ 2015 built yachts currently on the open market: the 81.80m Abeking & Rasmussen ROMEA (asking EUR 145,000,000) and the 77.10m Silver Yachts, SILVERFAST (asking EUR 79,500,000). These prices appear to be many miles apart, but if you look at the actual value in terms of tonnage, SILVER FAST is 33% more expensive per ton than ROMEA! (There is an article that goes into more depth on valuation on pages 18-19).

YACHT REFIT & RESTORATION

As the global fleet gets older, there is a feeling that an era of refitting over new build will soon dawn upon us. In much the same way as classic cars are lovingly restored, more and more yachts are benefitting from restoration and refitting work. 

As we know, the scope of a refit can vary hugely: from the relatively simple changing of soft furnishings (e.g. 2005/2015, 55m, Feadship, MADSUMMER) to complete interior refitting (e.g. 2011/2014, 55.40m, Proteksan, TURQUOISE) to the full classic yacht rebuilds that take vast amounts of time, passion and money. A prime example of this is the 50.29m, 1937 Camper & Nicholsons MALAHANE that was bought for less than EUR 450,000 in 2012. She subsequently went to Pendennis – the highly revered UK yard in Falmouth, Cornwall – and had many multiples of her acquisition cost spent on restoring her to her former glory. There was one serious change though: all of her systems (be they electrical, plumbing or mechanical) have been replaced by the most up-to-date systems available on the market. Re-launched in 2015, she is available for charter through Cecil Wright & Partners from EUR 135,000 per week.

An excellent example of a complete conversion is the 1969 launched, 2008 converted, 70m, AMADEUS that Cecil Wright & Partners sold at the end of 2015. Originally launched as an oceanographic survey vessel, she was painstakingly redesigned, retaining only the hull and the fuel tanks. This type of project requires some serious imagination – we are of course happy to assist you with conceptualising any projects you might have in mind. 

THE FEADSHIP MARKET

As it stands today there are 33 Feadships on the market including some interesting classics that have been refitted. The 60.40m KINGDOM COME (1979 / 2015), the largest Feadship in the world at the time of launch, has just come onto the market (asking EUR 17,850,000 VAT paid) having passed her Lloyds special survey with flying colours. The 46.9m BG (1990 / 2015) – though not quite as old as some – has had a complete internal refit, making her contemporary on the inside but with her beautiful original exterior maintained (asking USD 14,990,000). 

It is a firm belief of mine that once a Feadship hits 30 years of age and joins the Feadship Heritage Fleet, the vessel will retain its value (or even potentially increase in value) if the yacht is maintained to a high level. 

In terms of the post 2000 Feadships we have had a couple of old faces back onto the market. I would say that those of particular note are the 62m POSITIVE CARRY (2005, refit 2014), the 55m MADSUMMER (2005, refit 2015) and the 40m SEA FLOWER (2005, refit 2012). We know that all three of these yachts were bought at good prices within the last three years, and now that the market has recovered the owners are looking to realise this recovery when they sell them on. This is a very positive sign.

The 46.60m KISS (2015) has just had a price reduction and is certainly one of the most appealing yachts on the market today. 

POSITIVE CARRY
62.00m, 2005 (Refit 2014)
Asking USD 49,750,000

MADSUMMER
55.00m, 2005 (Refit 2012)
Asking USD 37,500,000

KISS
46.60m, 2015
Asking EUR 34,950,000

SEA FLOWER
40.00m, 2002 (Refit 2012)
Asking EUR 11,900,000

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