The good news from the brokerage market worldwide is that the growing level of activity witnessed in 2011 and 2012 has been maintained. Yachts are being bought and sold in increased amounts. Last year saw the highest number of yachts sold in one year since the crisis began (272 – a 34% increase on 2010) and this year, after just under 11 months, 274 yachts have now been sold, setting a new post-crisis record according to industry statistics supplied to YPI by Boat International.
However the overall market trends are a little less encouraging especially as they are consistent. The average size of yacht sold continues to fall. So far this year it sits at 35.39m, a drop of 8% on 2010. The average Asking Price is also down, EUR 7.3m, a massive 40% drop from the heady heights of 2010 when it sat at EUR 12.1m. Equally, the number of yachts coming to the market for sale continues to outpace actual sales by around 35%. The top three brands in the brokerage market so far this year are Sunseeker, Feadship and Benetti, a result that has changed little over the last four years.
The average age of yacht sold remains fairly constant sitting at around 12 years old with almost 55% of yachts sold falling between 4-13 years old. The good news for some owners, is that a healthy 20% of yachts sold so far this year are between 14 – 25 years old.
When it comes to the sailing yacht market, the number of sales and indeed the average size remains consistent, with 24 sales so far this year against the yearly average of 26, averaging 32m in length. Sadly however the average Asking Price drops from a 4-year average of EUR 4.9m to just over EUR 3.5m.
“Statistics rarely tell the full story,” says YPI Director of Sales, Russell Crump who has himself contributed to no less than three significant sales in this year’s figures. “There is presently a lot of activity in the market place. Quality, custom and semi-custom yachts are not only selling but selling for correct values. The reality however is that there continues to be a number of production yachts and older yachts available in the marketplace which the vast majority of the buying market will always purchase. These deals affect the stats and the averages. You only have to look at some of the specific sales this year to properly see where the market is heading – yachts like RED SQUARE, TRIPLE SEVEN, CANDYSCAPE II, APRIL FOOL, GALACTICA STAR etc. And whilst no one is saying it’s easy to sell your yacht and get the price you want today, if you have a well maintained yacht ready for a new owner to enjoy together with a good broker who knows the market and the right people, your yacht will be sold.”
NEW BUILD MARKET
According to Boat International 97 orders have been recorded so far in 2013 (compared to last year’s figure of 136). The largest order to date is for an anonymous 130m build placed with a Dutch yard closely followed by two separate 120m projects. Encouragingly 18 orders are for yachts over 50m, with 6 orders for over 70m. The average size of yachts ordered so far this year is 39.9m, more or less the same as previous years. Italy once again enjoys the lion’s share with 16% of all orders closely followed by the Netherlands on 11% and then an astounding 8% for Taiwan primarily thanks to orders placed with Ocean Alexander and Horizon yards.
Stats for the charter industry are a lot harder to come by than sales stats so much of how we gauge industry success is based on broker feedback and industry opinion.
“The trend we first started to see back in 2009 of charter bookings being made at the very last minute, has continued into this year,” says YPI Senior Charter Broker, Annemarie Gathercole. “Although it has to be said the days of charterers receiving significant last minute discounts are coming to an end. Owners are generally holding firm on their rates these days because there is increasing demand especially for certain types of yacht. As with last year, the summer season has been a busy one and I’m pleased to say that overall we were able to book around 70% of our inventory despite the VAT concerns and political turmoil of earlier in the year.”
Similar to the trends in the brokerage market, the size range that appears to book the most volume is the 30 – 50m range although there are signs that this is starting to change with increased interest being shown in larger yachts such as PEGASO and AXIOMA (ex: Red Square). This year, the most popular charter locations remained in the West Med but, says Annemarie, Greece, Croatia and Turkey have all seen a considerable amount of activity.
“The tax issues surrounding France, Italy and even Croatia this season did have an impact on charterer confidence,” explains Senior Charter Broker, Vaniese Baldacchino. “As well as making our lives just that little bit more hectic! But in the end the 2013 summer season was a solid one, if not a spectacular one, and we have continued to see some green shoots coming through in terms of first-time charterers which is important for the future.”
One yachting sector where the full effect of the MLC 2006 and a host of other new and updated regulations has been witnessed is in Yacht Management and crewing (see article: ‘THREE MONTHS ON…HAS THE MLC 2006 HELPED OR HINDERED YACHT OWNERSHIP?’).
“The MLC 2006 and the other regulations have resulted in existing yacht owners, and those contracting to build, deciding to turn to management companies to help ensure their yachts and crew properly comply and that ownership structures are set up for the maximum protection and efficiency,” explains YPI Head of Yacht Management, Frédéric Laporte. ‘The time has come when that investment potentially pays for itself in project costs and fiscal savings.”
“Buyers are now taking much more interest generally in where their money is being spent and how, and at a much earlier stage in the process. They are much more aware of the technicalities and legalities of their yachts and the increasingly costly consequences of not getting it right.
“Management is influencing more and more the brokerage side. Owners don’t just want to give a price to a shipyard to build a yacht - they want a technical opinion before they sign the contract. They want to know about flag registrations for example - management has a fuller view of tax, operating costs, crew issues – so we can give owners the real figures and not just those for the cost of buying but operating as well.”