Superyacht sales market: fizz subsides
The 95m Kismet sold in September with an asking price of €149m euros. Photo: Christie Yachts.
If the superyacht sales market is a bottle of vintage Champagne, then the bubbles are settling after the shake-up of the Covid era and a time of cheap money.
Transactions in the brokerage market have dropped this year compared with 2022 and are certainly well off the frenzy of 2021 when the existential threat of Covid changed many people’s priorities.
As the pandemic took hold in March 2020 it brought the industry to a “grinding halt,” says Jamie Edmiston. The Edmiston CEO admits he even had conversations about mothballing the company, but he says the market flickered back to life in late May of that year.
“I think two things happened: people realised their own mortality – they thought, ‘I could actually die so I might as well spend this money I’ve spent all these years earning’; and secondly, they figured a yacht was a good place to be during a pandemic,” Edmiston tells Superyacht Investor.
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The following years were “extremely good for the entire industry,” he says, but with a very different global economic landscape of high inflation and high interest rates now, it appears the froth is coming off.
Between January and September this year, 516 yachts over 24m (80ft) were sold, which represents a 14% reduction on 2022, according to information provided by TJB Super Yachts. The number of used yachts sold has decreased by 17% on 2022, while new-build yacht sales have gone down by 27% over the same period.
“What we’ve seen this year, for sure the industry has slowed a little bit,” adds Edmiston. “The top end of the market remains strong in the 70m-plus bracket, but we’ve definitely seen across the industry the volume of transactions decline.
“We’re not negative but we’re cautious about what will happen over the next 12 months.”
Kismet is one of a number of top-end superyacht sales this year. Photo: Christian Ferrer.
‘Market dividing’
Recent top-end sales include the 115m (377ft) Ahpo built by Lurssen, which was listed at €330m, the 95m (311ft) Madsummer (asking price €227m), and the 95m Kismet, another Lurssen (asking price €149m).
Will Christie, founder, Christie Yachts, who represented the buyer in the Kismet deal, suggests there are now two different markets at play.
“I am seeing the market dividing a bit into two – over 60 metre, good quality yachts which aren’t too old and are in good condition seem to be selling at pretty firm, good prices,” he told Superyacht Investor.
“Under 60 metres, and certainly under 40 metres, the market has been softening. People at the lower end are maybe feeling a bit more pain from interest rises than maybe people who are at the top end who tend to be billionaires rather than multimillionaires.
“If you’re buying a boat for €100m, that’s probably a much smaller proportion of your net worth than if you buy a boat for €10m, then you might be worth about €100m.”
‘Cooling off’
Shipyard orders are full, in some cases until 2027, says Christie, but the sharp increase in new-build costs, fuelled by wage inflation and an increase in material costs, is slowing demand and in turn keeping prices inflated in the brokerage market.
This throws up a dilemma for potential buyers. “You have a choice between waiting three or four years for a new one and paying a really big price or buying whatever exists on the brokerage market and supply of those is pretty limited,” adds Christie.
“So you’re seeing owners selling boats with little or no depreciation or sometimes even selling at a premium, but it’s still a hell of a lot less expensive than waiting for a new boat. With new-build prices up 40% in the last few years in some instances, it’s really holding up the value of brokerage yachts.”
An owner told me last week he needs to see blood in the water before he gets in
Tim Johnson, the CEO and founder of TJB Super Yachts, says a “cooling off” period is well overdue for the superyacht market.
“The general view is that people are waiting for, and have been for a good six months, the market to turn,” he tells Superyacht Investor.
“There are still buyers out there with €80m in cash ready to go, they’re just waiting for their opportunity. They’ll be testing the water with lower offers, sub 20%, and then when someone gets desperate enough [to sell] they’ll buy.
“An owner told me last week he needs to see blood in the water before he gets in there.”
RIO was sold by TJB Super Yachts and TWW. Photo: TJB.
‘Ludicrous’
Geoff Moore, MD of West Nautical, also senses the market is facing a pivotal moment.
“You see that in the luxury car market, the real estate market, the watch market, the wine market – everything has reached a plateau now and hopefully it’s going to start coming back down the other side,” he says.
“I don’t think it will reach 2008 levels but certainly something is coming around the corner where it will be a buyers’ market where deals can be struck as opposed to the last few years when shipyards have had all the power.”
Christie says he is “passionate” about what he sees as wrongly inflated asking prices in the industry, leading to increased time in the market and associated costs as a result, and he urges owners to ask more questions about the state of the superyacht market and to “not believe everything they hear” from brokers.
“The disparity between asking prices and selling prices is ludicrous,” he says.
But he added: “I love this kind of market. Anyone can make money in an ever-rising market.”
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