The superyacht market has been experiencing buoyant conditions in the wake of the pandemic, as pent-up demand has led to an increase in second-hand sales and shipyards are reporting full order books. With sales in the 100 metre-plus sector typically few and far between, Andy Holmes, Sales Broker at Moravia Yachting, discusses the current dynamics at play in this anomalous market segment.
A niche within a niche
“The 100 metre-plus sector is the top of the pyramid,” Andy explains. “There are very few people in the world who can purchase a decent sized yacht over 24 metres. So, it naturally follows that the number of people who can not only purchase, but more importantly afford to operate, a yacht over 100 metres is even less. With a finite number of potential clients, of whom some may already own a yacht, the turnover of yachts in this size bracket is very intermittent.”
And there are other factors that make this size segment challenging from a purchase and sales perspective. While the lengthy design and build process for 100 metre-plus new-build projects – spanning around five to six years – can be off-putting, yachts of this size in the second-hand market will often have highly bespoke interior layouts and designs that are very specific to the existing owner’s preference and requirements.
“There’s an awful lot of real estate to consider on a 100 metre-plus yacht,” Andy continues. “For example, the recently delivered 108m Benetti Luminosity has over 1,600m2 of interior guest space and just over 1,400m2 of exterior teak decking! How the interior and exterior is laid out and designed is important so that it meets the usage requirements and tastes of the owner. Buying a yacht of this size is, therefore, clearly not as straightforward as it would be for a 50-metre yacht.”
A sparse second-hand market
Considering that sales in the 100m-plus market are infrequent, the recent sales of both the 105m Lady Moura and the 126m Octopus in 2021 were significant, but not necessarily indicative of increasing market activity. As Andy postulates, the sudden uptick in annual sales is more likely attributed to the fact that two unique and iconic vessels happened to come on the market at similar times.
“Both vessels were being sold by the original owners and both are globally recognised within the superyacht industry, and probably outside the industry as well,” he says. “Octopus, for example, had been around the world several times and involved in some extraordinary research projects.”
At present, the only 100 metre-plus yacht officially listed for sale on the second-hand market is the 108-metre Benetti IJE. Delivered in 2019 and with an asking price of €175,000,000.00, IJE was built as a family-orientated yacht for an experienced owner. There are, though, a handful of 100 metre-plus yachts that are unofficially available for sale and whose owners are known to be open to enquiries.
New-build market growth
It is also fair to conclude that the activity on the second-hand market has been limited by the primary market, where there are currently more new-build projects over 100 metres under construction than there have been in recent years. With an estimated 23 yachts over 100 metres in build, including two sailing yachts, there is definitive growth in this segment.
“A significant number of these projects are being built for repeat clients and existing owners who already have yachts just below the 100-metre mark,” comments Andy. “It is representative of current yacht owners having the confidence and experience of owning an already sizeable yacht and seeing the benefits and potential of investing in something larger.”
“Indeed, over the next two to three years we will see the fleet of 100 metre-plus yachts increase by circa 40 per cent.”
Another factor that is encouraging growth is the development of suitable infrastructure. “Several years ago, yachts of this size were often restricted to commercial docking, which limited the ownership experience,” adds Andy. “But more and more marinas are now able to host these larger yachts and this has added to the enthusiasm to buy these vessels.”
The vast majority of clients looking to buy a yacht of this size range will have extensive experience in the yachting industry, either through previous ownership or charter, and will have a solid idea of what they want. For such clients, Andy acknowledges that there are several different approaches.
He concludes; “Some clients prefer to buy a yacht already built to avoid waiting the lengthy build times – either new build or second-hand – and undertake a complete interior refit to tailor it to their tastes and needs; as has happened recently with Jubilee (now named Kaos). Personally, and given the high probability of it being an existing yacht owner, I think it makes sense for clients investing in this size of yacht to go down the new-build route and start from the drawing board so that they get exactly what they want. They have their existing yacht for the build phase and then, if they do deliver something that others also view as amazing and unique, there is always the possibility that a buyer who simply must have the new yacht will offer a premium for it.”