Fractional ownership presents flexible solution
Smart Yacht offers this 23m hybrid yacht on a fractional ownership basis for cruising in the Mediterranean.
Fractional ownership of a superyacht can offer a practical and flexible solution for all those wanting to experience yachting, novice or expert, SmartYacht’s Verena Bruenings told us in an interview with Superyacht Investor.
“Fractional ownership can be an attractive solution for both, new potential yacht buyers, because of reduced investment, a professional service and calculated annual costs, as well as for experienced yacht owners who found out how much money and time goes along with yacht ownership,” said Bruenings.
This is despite some industry figures claiming that fractional ownership is not a fruitful business model. For example, Jim Evans, managing director of brokerage house Super Yachts Monaco, said: “Fractional ownership has never really worked in the past. There have been various initiatives to try to make it work, but none have really succeeded, and I think that’s because ultra-high-net-worth individuals are alpha types. The negotiation in regard to location and dates with other owners is probably impossible.”
However, Bruenings would argue otherwise. She said SmartYacht has seen people shifting from traditional models to smart-sharing solutions in the eleven years since the company adopted the model. So much so, SmartYacht is convinced that fractional ownership schemes will gain further traction in the 2020s – driven by changing attitudes towards ownership. The company currently has more than 3,000 clients registered and waiting for “the right yacht share”.
“People have neither the time nor the inclination to buy, maintain and run a yacht by themselves, but they still want more than an occasional charter week. Therefore, they become open-minded in terms of innovative ownership solutions/alternatives. They are looking for a flexible solution tailored exactly to their individual needs (in terms of usage, investment, location, group of co-owners. Moreover, they often want to combine ecologically and economically sensible solutions. For example, we recently received requests for shared solar catamarans or hybrid yachts,” said Bruenings.
Floating Life’s Manuel Maiano told Superyacht Investor: “We are really happy because now there is a significant increase of interest from the market that we already know very well having been involved since 2008. We believe that the new generations are more oriented to fractionally owned properties and will use our experience to manage new projects.”
The obvious benefit of fractional ownership is the reduction in cost according to Bruenings but there are other benefits too. “Owning and paying for a yacht for the whole year but only being able to use her for up to 10% of the available time isn’t very smart. Fractional ownership offers an option to run yachts more economically and efficiently and also keep them in good condition as, for yachts. nothing is worse than sitting at port unused. Chartering on the other hand is always a bit of a gamble as people don’t know what they get and everything you rent will never make you feel at home.”
Maiano also made the differentiation between fractional ownership and charter: “Definitely the sharing of costs is a great plus. Our program is more detailed than a traditional charter and our experience gives the opportunity to the clients to have an innovative system evolved to be compliant with all new international laws. Our fractional ownership program includes our Yacht Management service that permits [one] to own a yacht without hassle.”
Fractional ownership models have been informally operated between friends and relatives owning yachts for decades, often with smaller vessels. Bruenings said the clientele at SmartYacht encompasses all sizes and types of yacht. “Most shares we currently offer/broker are motor yachts ranging from 45ft – 90ft in the Mediterranean which is reflecting the majority of requests. In general, we do not see a limitation to size as the benefits are there for all yachts, whether they are small or large. The majority of boats in the SmartYacht fleet are secondhand boats because our experience is that prospects prefer to acquire a share in an existing, ready-to-go yacht, purchase part of the yacht as viewed (fully equipped) and start to use it right away after the purchase.”
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