With 2013 getting off to a good start, the figures show that nearly a third of sales came in June alone: 49 out of 165, for a monthly cumulative asking price of €349,316,600. We have become used to seeing blips and false starts since the GFC, but is this recent jump a cue for sustained optimism? For once, it appears so.
‘The whole year so far is not bad,’ says Fraser Yachts CEO Hein Velema. ‘I have all the figures for the years 2009 to 2013, and sure – in the number of sales it’s the best year so far, although not hugely different to 2010 and 2011. Last year was disappointing; this is one of the good years for value, but not the best.’
In sales, the sailing yacht market still lags behind the motor yacht sector, although the figures for 2013 so far suggest room for optimism there too. In fact, more sailing yachts were sold in the first six months of this year than any six-month period since the start of 2010, except for 2011. New projects are also somewhat hard to come by, although the more boutique builders are seeing encouraging signs. ‘From my point of view the market is going very well,’ says Riza Tansu of Turkish builder Tansu Yachts. ‘You have to be unique, as people are looking for something different, something simple. My target group don’t want a copy, and they don’t want a second-hand boat.’ Tansu has three projects in build in the 35 to 40 metre bracket, with a further two likely to start soon. His clients seem to be largely Western and Eastern European, and Turkish buyers living overseas.
For brokerage, Velema remains positive that the rest of the year will continue to bear fruit. ‘I don’t see any trends of a slowdown in the market,’ he says, ‘and the year as a whole will be comparable to 2010-11; 2013 will be better than last year – I can’t see why not.’
For Russell Crump, yacht sales director at Yachting Partners International (YPI), the message is even more clear. ‘We’ve had an astonishing year to date,’ he enthuses, ‘and it’s not over yet. We have pipeline business coming out of our ears, with a lot that will probably close around the Monaco Yacht Show. The industry has been flooded consistently for the last three years with malicious rumours that yachting was going down the pan, but it’s looking good.’
For all the enthusiasm, the European market remains somewhat stagnant. ‘The European buyer is more subdued than his US and Russian cousins,’ Crump continues. ‘My gut reaction is that it’s not a good look for someone coming from, say, Greece to be buying a large yacht.’
Velema agrees. ‘The years 2010 and 2011 were very much European focused,’ he says, ‘but this year is more balanced. Europeans are not willing to commit.’
So what is driving the upsurge in the market? ‘Middle Eastern buyers are using the strength of their dollars,’ says Crump. ‘They like a bargain, and they’re finding bargains. Inflation in yacht pricing has gone out and the dollar is gaining against the euro, so Middle Eastern and US clients are getting better value. The US has the largest group of people who can buy. I’ve been to the US and the surveyors I meet there are surveying boats every week.’
Velema agrees. ‘There is activity in the US,’ he says, ‘although this is focused more on brokerage and charter. We don’t see them doing many new builds. Otherwise, it’s very much Russian and Middle Eastern clients. More promising too is South America, where we are seeing a big charter market, which will hopefully be followed by sales. Brazil in particular was hotter last year than this, as the economy is weakening a bit, but the good thing is that Brazilians are buying houses overseas and are more willing to have a yacht elsewhere – particularly considering the import taxes in the country.’
‘The US is proving more important in general for charter,’ Velema continues, ‘and we are still crazy active in booking. We were afraid that after 15 July (the date the French VAT exemption ended) the market would suddenly die, but it is still positive.’
The VAT issue is perhaps the only real cloud on the horizon. ‘It has put a dampener on things,’ says Crump. ‘Try telling an owner from the Middle East that when he wants to use his boat in France he has to pay VAT. The situation has irritated everyone, and it’s going to slow things up. Those that haven’t paid VAT on their yachts are going to be asking, “Do I join the rat race, or do I go to Fiji, the Galápagos or somewhere else?” I see a rise in alternative charter destinations. We recently signed 73m Pegaso for charter, and have already had a lot of interest – she will be in Abu Dhabi for the F1, then the Maldives and Seychelles this winter. For the VAT issue, we need to come together as an industry, and we need a voice in Brussels.’
Even this can’t dent overall optimism. ‘There is more economic data coming out which is not all doom and gloom,’ says Crump. ‘Over the next 12 months we will also see more European buyers.’
Adds Velema: ‘We need a bit more confidence in the European market – if you add that to the Russian, US and Middle Eastern activity it will be good.’
‘The momentum will continue,’ Crump concludes. ‘We will have a very interesting Monaco show and an even more interesting Fort Lauderdale show. This year is going to be astonishing.’
2005 / 2011