Mega yachts have DJ booths and floating perspex dance floors
Nic Arnold, head of luxury asset advisory at PwC, also talks about an emerging concept in Turkey to develop smaller sized superyachts designed to be lived on permanently.
How much do the UHNW clients spend on superyachts?
Recent deliveries of some of the largest yachts for clients have been in the £300 million range, while Roman Abramovich’s 162.5 meter motor yacht Eclipse, which was launched in 2013, is said to have cost around £270 million. It includes three helicopter landing pads and its own submarine. Of course there are many smaller yachts, but the build or purchase prices will still often be in the tens of millions pounds for UHNWi’s. Some UHNW clients will charter yachts before taking the plunge to buy. However, the prices are still high. Solandge, which is said to have a Gatsby-like allure, with Ibiza style bar, state-of-the-art DJ booth, Karaoke system and floating perspex dance floor for example, charters for up to £786,000 per week.
What new trends have you seen this year?
There is always discussion about being as green as possible with new builds, although I suppose that ‘being green’ is the future of all technology. I know that some banks have pulled out of financing yachts, but Investec have bucked the trend and recently entered the market. There’s an emerging concept at Sunrise Yachts in Turkey to develop smaller sized superyachts designed to be lived on permanently.
There is also a general move to improve governance of superyachts. I’ve heard this from a number of lawyers, accountants and brokers. This really is a good thing and will ultimately attract more wealth to the yachting industry which has behaved like a cottage industry but can’t any more because of increasing scrutiny in all respects.
Are yachts still a good investment?
Long gone are the days of pre-2008 when UHNWi’s might put in an order to build three yachts with the expectation of selling two at a profit to people who could not be bothered to wait for years to build their own. While a UHNW client might not expect to make a profit from their yacht these days, the orders for new builds and numbers of second hand sales are strengthening post-recession.
What is the most expensive yacht sold recently?
The most expensive yachts will be built to order. In this case, and at the top end, the most I have seen is over £300 million. Yacht builders say it costs about £1 million a meter for new builds, but you only need to throw in some expensive fittings or technology and the budget is blown.
Give us your best tips for buying a yacht.
Do treat your purchase with the same planning and governance as you would money spent in your corporate or personal life. Work out upfront exactly what you want from your yacht so you can match this with the types of yacht and its ownership and management structure. Secondly, don’t listen to just one ‘trusted’ adviser, they will be biased in one way or other. Finally, do take tax and financial advice on running your yacht so that the full cost of ownership is understood. Regulations are constantly changing, especially in the EU, and staying on top of them requires attention. This will help prevent the classic lament “the best day of my life was the day I bought my yacht, and the second best day of my life was the day I sold my yacht”.