How much does it cost to enter the superyacht market?
Buying a 24-metre yacht - the normal entry point for the superyacht market - costs upwards of £3 or £4m. 2015 has seen the average length of superyacht purchased being just over 35 metres, at an average asking Price of just over £4.3m. On top of that, you need to factor in its upkeep - crew, maintenance, insurance, and berthing – which equates to around 10% of the purchase price.
Where do I start?
More than 2,000 super yachts, new and pre-owned, are actively being marketed at any one time. This includes yachts of various styles, brands, functions, ages and in varying condition. A broker is there to guide you through the selection and purchasing process, and to pinpoint those yachts on offer that fit your needs in the medium to long term. The brokers know the history of most yachts, can provide clear informed guidance on future running costs and likely re-sell values, uncover ‘off-market’ deals that are never published on websites or in magazines, negotiate on your behalf with an owner’s broker and ensure your interests are protected throughout.
Is it a buyer’s or seller’s market at the moment?
For several years after the global economic crisis it was a buyer’s market and, with the help of an established broker, it was possible to knock up to 30% off the advertised price. This year, demand is starting to outstrip supply but there remains a great choice and excellent market conditions favouring buyers.
What are the pitfalls to avoid?
Firstly, don’t compromise too much on an interior layout just because you love the outside design. Unless you are planning to refit, remember the interior and decks are where you and your guests will be spending most of your time. Secondly, don’t be too fixated by speed; fuel costs normally mean you will rarely take advantage of the yacht’s capacity. Thirdly, don’t solely focus on a purchase price to achieve your idea of a ‘great deal’. Yacht condition, running costs, re-sale value, charter potential and crewing needs all go together with price to indicate what is the best deal for you.
Would you advise buying new or pre-owned?
Buying new or pre-owned depends on what you are looking for. If you really can’t find a yacht in the pre-owned market – build it. A good broker will help negotiate with a chosen yard to ensure the price, warranties, stage payments and legal issues are properly covered for you. The broker can also help manage the project on your behalf to ensure its stays on budget and on time. Today, many quality yards are keen to offer excellent terms and conditions to buyers so it is worth exploring - although be aware that in the current climate (and probably for many years to come) buying a yacht is purely for your own enjoyment, not for securing financial return on your investment.
Buying pre-owned means you don’t have to wait two or three years to receive your yacht. You can have it within 6-12 weeks. There is great choice available, and many buyers today are buying yachts at excellent rates and use the money they save on building or buying new to refit the interior to their own taste resulting in their ‘perfect yacht’ - often for a reduced overall cost.
When is the best time to buy?
December and late spring are the two main buying seasons, mainly because the new owners want to have their yachts in time for the summer season in the Mediterranean or winter in the Caribbean. However the market is active all year round.
Is there a smart way of offsetting costs?
Chartering your yacht is one of the most popular ways of offsetting costs. Around 1,400 superyachts out of a total fleet of around 6,000 are available for charter. Chartering is an effective way of generating revenue to help offset maintenance costs for the owner, and it keeps the yacht and the crew in top condition. This is important considering most owners only use their yacht personally for four-five weeks a year. For the last two years we have chartered the 72-metre new-build yacht, Axioma; she generated more than £4.5m in her first year of charter alone, which was a fantastic return for her owners. This was reinvested straight back into the yacht resulting in an even better charter season this year.
For more info, go to ypigroup.com
