Edmiston’s advice and market snapshot
Jamie Edmiston (left) talks at the Superyacht Investor London 2024 conference.
Buying a superyacht that you can’t afford to give away is not the smartest plan for an investor, according to Jamie Edmiston.
“There is zero pleasure to owning a big, expensive yacht if you have to worry about whether or not you can fund it,” said the CEO of Edmiston, speaking at Superyacht Investor London 2024.
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Fortunately for the industry, there appears to be enough owners who can afford it or are happy to ignore Edmiston’s advice, even if there is a widely accepted cooling of the market since the crazy days of Covid.
There are 6055 yachts above 30m in the world as of April 2024, with 890 for sale, according to figures presented by Richard Lambert, senior partner and head of sales, Burgess.
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Opening the conference, Lambert suggested the market has returned to a “more stable, normalised period of trading” with “sensible” growth of about 5%.
“There is positivity in the market, people are still building, there’s still an appetite and a future and although it’s been a little bit more challenging recently it’s still very bright for the superyacht world,” said Lambert.
US domination
The dynamics of a transaction appear to have changed though, with buyers being more “bullish”, he suggests. “As an industry, on brokerage stock, we’ve been quite limited over the last few years so it is actually good for clients to come in and actually have a greater choice of yachts for sale. But we’ve seen a little bit more of take it or leave it from buyers,” he said.
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Edmiston also suggested the market had broadly tilted towards the buyers but noted that different forces may be at play at in the very top segment. “If you’re looking at 100m plus yachts, or let’s say 80m plus yachts, it’s more of a seller’s market,” he said. “It really depends on what size you want to buy, what shipyard, what pedigree. The trick is to be realistic about pricing.”
US buyers have “backfilled demand” in the gap vacated by Russians in the very top end of the market, and overall own 53.7% of superyachts worldwide, with Turkey the next highest owner representation at 4.2%, according to Lambert.
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Richard Lambert of Burgess on the state of the market at SYI London 2024.
‘Explosion of transactions’
Indeed, the US market is “pretty hot right now”, according to Andrea Sinacola of Florida-based Robert Allen Law.
This is fuelled by “underlying desire for boat ownership”, particularly in Florida, but across the whole of the US, said Jeremy Roche, of Denison.
Sinacola said the impending presidential election is adding an element of caution among more risk-averse clients, but says there is another group who “just love to make a deal” and will continue regardless of politics or global happenings.
She predicts an “explosion of transactions” after the election, noting that a Trump victory would likely encourage more yacht deals. “In general, our clientele generally feels more confident when a Republican is in office, even if that is Donald Trump,” she said.
Disparity in prices
Paolo Casani, CEO, Camper & Nicholsons suggested the industry was “more and more independent” from politics.
“We are at the peak. It’s an extra luxury,” he said. “This can be affected only by a strong financial crisis affecting the stock market, or pandemic… but nothing else, in my opinion, other than a Third World War.”
Patrick Coote, MD, Northrop & Johnson, said the market is “somewhere in between boom and bust” but echoed Casani in that figures for 2024 are up on the Q1 period in 2023.
“I tend to rather flippantly say that I don’t care whether the economy is booming or crashing,” he said. “What kills us is when the market’s turning and there’s uncertainty. Because when things sort of grind to a halt and slow down, that’s when it is more challenging for us.”
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From left to right: Patrick Coote, Northrop & Johnson; Tim Davis, Burgess; Will Christie, Christie Yachts, Chris Cecil-Wright, Cecil Wright.
Each segment has different issues but one headwind in the 60m plus category is the number of yachts for sale, according to Chris Cecil-Wright of brokerage Cecil Wright & Partners.
“At the moment, there are a few really quite good boats coming onto the market, but we are only talking a handful, 10,” he said. “So for us, the headwind is always the quality of the second-hand stock.”
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Coote pointed to the stalemate that occurs when sellers are still “holding out for a higher price” and buyers are waiting for the market to drop and “not budging”.
“I don’t know any industry where the disparity between asking prices and selling prices is so big,” said Will Christie, founder of Christie Yachts.
Countering the theme of AI and disruption in the industry, Christie said that relationships, emotions, egos and delicate human situations need to be managed during a transaction. “It’s a confusing and opaque market and you need someone with experience and credibility to explain that to you in person,” he said. “I just don’t think machines can do that. That’s why I believe brokerage will continue to be such an important part of this industry.”
Dark arts
On the theme of a yacht’s value, Tim Langmead, a sales broker at Fraser Yachts pointed out there are generally three figures to bear in mind – the asking price, the sales price which is often lower, and the net to seller price after fees and renegotiation. “That’s important to put out there when we’re talking value because it covers a lot of ground as a word,” said Langmead.
“Yachting isn’t always logical, there’s a lot of emotion – do they look good, do they do the right job. We try to give as much science as possible but there is a lot of the dark arts in the background.”
Edmiston’s “cautious optimism” for the market was backed up by a poll of delegates at Superyacht Investor which suggested 79% were “fairly optimistic” for the year ahead.
“I don’t think people will stop going yachting,” added Edmiston. “It is without a doubt, the best holiday you can have. It’s the best place to do business. It is addictive.
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