Off-market FOMO and a ‘changing’ landscape
The Feadship Hampshire is for sale with Cecil Wright.
It is reasonable to assume all yacht brokers have FOMO (fear of missing out). They must do with all the talk of off-market deals flying around. It’s like being at the party but with a nagging feeling that the real action is happening in another room.
With the boat show season looming large in Europe, there will be shiny kit aplenty on pontoons and at anchor in Cannes, Monaco and across the Cote d’Azur.
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But behind all the marketing banners and the social posts and the unfeasibly glamourous desk jockeys and the QR codes and carefully curated time slots, there is a pervading sense that the best sport is happening quietly elsewhere. And to fuel the FOMO, just as fishermen always exaggerate the size of their catch or surfers insist “you should have been here yesterday” so all good brokers must mention how busy they are with off-market deals, even though they can’t talk about them.
“It is certainly becoming more prevalent, particularly with big boats,” says Henry Smith, partner at Cecil Wright. “There’s a network of us who deal in these bigger boats and we communicate with each other a lot over them.”
Will Christie, founder, Christie Yachts says he has been very active in the off-market market this year, including one deal where he acted for both parties.
“As a relatively new company I’d love to be screaming from the rooftops about it but I can’t,” he says.
Optics
Not that off market is the opposite to on market. Chris Cecil Wright, founder of the eponymous brokerage, prefers to use “not publicly listed”. That’s because in reality the yachts are still on the market, just not to the wider world.
“It depends on how privately the client wants us to market it,” adds Smith.
“Some of them will say, ‘Only tell the top 10 brokers and tell them not to tell anyone else in their company’. At the other end I will market to every single broker in our database, under strict instructions they can’t put it anywhere publicly.”
This desire for discretion has “myriad reasons” behind it, adds Smith. It can be because of social “optics”, or strategic business reasons, perhaps perceived as a sign of weakness if you are selling your yacht, or for security reasons, he explains.
“Part of it is to do with the amount of information that’s flying around the internet,” he says. “Because there is so much new wealth in the world, a lot of these younger guys I deal with take their privacy very seriously.”
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Other than missing out on a bit of marketing, Christie says operating off market brings its advantages.
“One of the great things about our job is we end up talking directly to 99% of our clients because they don’t necessarily want everyone in their organisation to know what they’re spending on a boat,” he says.
“Rich people tend to know other rich people, so if we do a good job our business will grow anyway. Whether we announce them or not, if we get deals done, that’s what gets us out of bed in the morning.”
Appreciating assets
Methods of marketing are one thing, but for deals to get done you need willing buyers and sellers. And both brokers agree the market has slowed this year. The “window of optimism” that opened with the Trump election result was “slammed aggressively shut” with tariff-gate earlier this year, according to Smith.
However, the consensus is that positive sentiment is returning, at least in the larger yacht segment. What is interesting, they both suggest, is the relationship between shipyard orders and the brokerage market.
“Speaking to the yards, they all seem to have full order books. But when you look at the brokerage side of life, it does seem to be slow, which is interesting, because the cost to build at the moment is very high,” adds Smith.
READ: Broker Christie on the art of the deal
Christie suggests the depreciation rate on used yachts could be lowering. “I even wonder whether these second-hand yachts will start to appreciate in value compared with what they cost to build, because build costs have gone up so much,” he says.
“In the old days everyone understood that second-hand yachts from top northern European shipyards depreciated at a compounded rate of about 4% a year, but I don’t think it applies anymore. There’s no general understanding of what they are now.”
He gives the general example of a new-build yacht which might have cost €100m to order just after the Covid inflation spike, which could now cost as much as €160m.
“I know people are averse to putting money in someone’s pocket but you could easily argue it’s worth paying €150m for that yacht now because you’ll have to pay that anyway to build one and wait four or five years. The client will say, ‘Why should I pay more than the guy paid to order it?’ Well, because the whole landscape has changed.”
He suggests this might even cause the perceived gulf between asking prices and selling prices to narrow, but he hopes brokers don’t suggest “even more crazy prices” just to win listings. “I still think accurate pricing is really important if you want to get a boat sold efficiently and quickly,” he says.
Reassuring
All of which leads us to show season in Cannes and Monaco. Cecil Wright has this week trumpeted the listing of the celebrated 66m Feadship Hampshire and the 68m Feadship Lady Christine. A major new-build project is also slated, while Smith will be showing the 36m explorer Zulu at the Cannes Yachting Festival.
One tactic Cecil Wright is adopting for Hampshire, which was delivered in 2016 as Vanish and sold by the brokerage within 90 days in 2018, is to include the upcoming 10-year special survey and hull repaint in the €85m asking price. It’s an approach it used in the sale of the 95m Lürssen Kismet in 2023 where the owner put a sum to cover the 10-year survey in an escrow account.
“It’s a very good way of reassuring buyers,” says Smith.
Christie, meanwhile, will be showing the 36m Mulder Seaflower, delivered in 2023, at Monaco. “The boat’s barely been used, the owner has slept one night on board and dry-stored her in a shed each winter,” he adds.
The Briton says it is sometimes difficult to quantify how effective a boat show is in the sales process, with buyers in Monaco tending to be more in the “early stages” of their journey and just keen to “get their eye in”.
He showed the 40m Baglietto Club M in Monaco last year and eventually sold it in July, to a buyer who initially came aboard at the show.
“He wasn’t a buyer then, other things had to happen in his life to buy later on down the line,” Christie adds.
But he says: “Monaco is a really good place to be to make sure you’re in front of all the key players in the industry. It’s not just the clients, it’s the next people in the network you need to be in touch with.”
And it certainly helps keep a lid on that FOMO.
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