Anchors aweigh for yacht buyers



The financial crisis now rocking the economies of southern Europe has created a buyer's market in seagoing yachts across the Mediterranean.

Price reductions are at their most obvious at the upper end of the market, where huge boats are priced at about US$1 million (Dh3.67m) for every metre of their length. But there is also a growing number of distressed and discounted sales to be had at every level of the market.

However, the price range of seagoing yachts is extremely wide, with catamarans costing six figures and luxury yachts fetching seven- or eight-figure sums. There is generally a boat for any realistic budget, with real bargains now starting to surface in the Mediterranean.

But high-end yacht brokers believe that a depressed market is creating real value for those with deep enough pockets to purchase a luxury ocean-going vessel.

"In our sector [35- to 70-metre craft], asking prices range from as low as €5 million [Dh24.5m] up to €70 million, but sales prices realised are more in line with €3 million to €50 million," says Rupert Nelson, the sales director of the Monaco office of Burgess Yachts, an international luxury boat broker.

This is not a market for the faint-hearted. When it comes to the kind of boat Burgess brokers, if you have to ask the price then you really cannot afford it.

"At the top end [60-metre range], €35 million will get you some very nice floating real estate. If you are really bargain hunting, then €10 million will get you a very good 45-metre yacht," Mr Nelson says.

"For the very large yachts, the ceiling appears to be in the region of €50 million - for this much you can choose from a few excellent yachts. There are also a number of 50-metre yachts available in the €15 million range."

But even the super rich of Europe are now beginning to feel the economic pinch and this is having a dramatic effect at every level of the European market for yachts.

"[The market is] not at all buoyant, in fact, right now and probably since the autumn boat shows - Monaco and Fort Lauderdale - the market has slowed right down ... the market is dictated by the buyers," Mr Nelson says.

He quotes the examples of Emerald Star and Lady Trudy, which were both sold at considerably less than their asking prices, which were $12m and $20.5m respectively against new-build costs of about $28m. Emerald Star was built in 2007 and Lady Trudy in 2011.

According to Burgess, the hottest bargains are to be found on the Mediterranean coasts of France and Italy.

"The shop window is the south of France between Monaco and Cannes, but also in Italy along the coast from Genoa to San Remo," Mr Nelson says.

He adds that seagoing yachts in the 50-metre range make the best long-term investments, with yachts produced in northern Europe holding their value for longer. But, according to Burgess, the days when a multimillion-dollar yacht was seen as a solid investment capable of weathering economic fluctuations better than stocks and shares are over for the moment. The financial climate in the Mediterranean economies is too stormy to be weathered even by the sleekest and most sought-after yachts.

"In a volatile equities market, a yacht was traditionally viewed as a safe haven for capital. These days, the situation is not so clear," Mr Nelson says.

In today's buyer's market, there is no guarantee that a new yacht purchase will be able to retain its value, let alone represent a profitable investment. This is because of the number of bargain-basement sales of yachts now taking place in the Mediterranean.

"A new build might not necessarily be an investment with guaranteed positive returns due to its initial high costs today when compared with a pre-owned yacht, which is normally on offer for considerably less," Mr Nelson says.

The financial strictures now imposed in southern Europe by governments and banks mean that the kind of easy funding that has for so long supported the yacht market has petered away, at least for the moment.

"The availability of cheap loans to finance yacht purchases has dried up almost completely," Mr Nelson says. "So the idea of paying a small deposit and then selling for a profit has all but gone."

International yacht brokers such as Burgess believe there is great potential interest in the Mediterranean yacht market from countries such as the UAE.

However, yacht brokers report little evidence of Middle Eastern interest at present. But Burgess is so sure of the scale of this potential interest from yacht buyers in the UAE that it is preparing for what it says will be the "imminent" opening of a new office in Abu Dhabi's Yas Marina.

But for those who cannot easily sign a cheque for millions of dollars, there are other options. The market for smaller yachts designed for seaworthiness and modest comfort rather than out-and-out luxury is currently also awash with bargains.

In the Mediterranean, the average three- to four-year-old 12-metre used yacht is between £80,000 (Dh456,393) and £100,000, according to Ancasta International Boat Sales, although the cost of a new boat may be slightly higher.

"If you're buying new, then a Beneteau Oceanis 37 mid-range cruiser should be on the water for around £105,000, while the New Beneteau Oceanis 41 is around £145,000," says Leighton King, a spokesman for Ancasta.

But even at that level, second-hand purchasers should bear the future value of a yacht in mind.

"If you're concerned about future resale values, then a big brand such as Beneteau is worth considering," Mr King says. "The used-boat market is normally kind to big brands."

He adds that purchasers need to consider what they want to use the yacht for and where they intend to keep it. Used yachts also come with a vast range of inventory, depending on what the previous owner decided to keep. Many potential savings, therefore, exist in buying a boat that includes much of the safety equipment, electronics and sails that are required by the new owner.

Mid-range yacht buyers should also buy a boat that matches their sailing experience. Some buyers, for instance, are now opting for catamarans because of their range and the fact they are easier for the less-experienced sailor than traditional vessels.

"Cruising ranges are higher with catamarans and there is currently a trend of boaters moving into catamarans from powerboats ... catamarans provide very few boundaries to access because the sailing element is nothing like as technical as monohulls," Mr King says.

According to Ancasta, vessels such as the Lagoon Catamarans also offer owners the option of using charter management to recover the running costs of the boat.

But while luxury ocean-going yachts may be seen as profitable in times of economic confidence, most boats are seen by their owners as money pits because of the cost of keeping the boat seaworthy.

Antipode Yachts caters for purchasers in the €80,000 to €300,000 range, a level where boat maintenance can often seem an onerous expense.

"Buying a boat is everything except a long-term investment," says Jerome Le Joubioux, a spokesman for Antipode Yachts.

However, the lower down the price scale the yacht owner is forced to go, the more likely he or she is going to be buying a boat for the love of sailing rather than as a shrewd investment.

"The price does not make the trip, you can sail around the world with a simple sailing boat of 28 feet at a price of €10,000, and you can stay in the marina on a huge boat of 200 feet at €10 million," Mr Le Joubioux says.

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COMPANY PROFILE
Name: HyperSpace
 
Started: 2020
 
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
 
Based: Dubai, UAE
 
Sector: Entertainment 
 
Number of staff: 210 
 
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
The fake news generation

288,000 – the number of posts reported as hate speech that were deleted by Facebook globally each month in May and June this year

11% – the number of Americans who said they trusted the news they read on Snapchat as of June 2017, according to Statista. Over a quarter stated that they ‘rarely trusted’ the news they read on social media in general

31% - the number of young people in the US aged between 10 and 18 who said they had shared a news story online in the last six months that they later found out was wrong or inaccurate

63% - percentage of Arab nationals who said they get their news from social media every single day.

German plea
Ukrainian President Volodymyr Zelenskyy told the German parliament that. Russia had erected a new wall across Europe. 

"It's not a Berlin Wall -- it is a Wall in central Europe between freedom and bondage and this Wall is growing bigger with every bomb" dropped on Ukraine, Zelenskyy told MPs.

Mr Zelenskyy was applauded by MPs in the Bundestag as he addressed Chancellor Olaf Scholz directly.

"Dear Mr Scholz, tear down this Wall," he said, evoking US President Ronald Reagan's 1987 appeal to Soviet leader Mikhail Gorbachev at Berlin's Brandenburg Gate.

If you go

The flights Etihad (www.etihad.com) and Spice Jet (www.spicejet.com) fly direct from Abu Dhabi and Dubai to Pune respectively from Dh1,000 return including taxes. Pune airport is 90 minutes away by road. 

The hotels A stay at Atmantan Wellness Resort (www.atmantan.com) costs from Rs24,000 (Dh1,235) per night, including taxes, consultations, meals and a treatment package.
 

The Bio

Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”

Holiday destination: “I like Paris very much, it’s a city very close to my heart.”

Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”

Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”

UEFA CHAMPIONS LEAGUE FIXTURES

All kick-off times 10.45pm UAE ( 4 GMT) unless stated

Tuesday
Sevilla v Maribor
Spartak Moscow v Liverpool
Manchester City v Shakhtar Donetsk
Napoli v Feyenoord
Besiktas v RB Leipzig
Monaco v Porto
Apoel Nicosia v Tottenham Hotspur
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Wednesday
Basel v Benfica
CSKA Moscow Manchester United
Paris Saint-Germain v Bayern Munich
Anderlecht v Celtic
Qarabag v Roma (8pm)
Atletico Madrid v Chelsea
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Ruwais timeline

1971 Abu Dhabi National Oil Company established

1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants

1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed

1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.  

1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex

2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea

2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd

2014 Ruwais 261-outlet shopping mall opens

2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies

2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export

2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.

2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery 

2018 NMC Healthcare selected to manage operations of Ruwais Hospital

2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13

Source: The National

The five pillars of Islam
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