High life on the high seas

Want to rub shoulders with movie stars and oligarchs? Then a superyacht might just do the trick – provided you’ve got eight or nine figures in the bank

Why do people buy superyachts? The most common explanation is the desire to escape the spotlight or the daily pressure of business competition. Bragging rights play their part too. 

So it must be incredibly frustrating to moor your precious new toy in the marinas of Monaco, St Tropez, Sardinia, Croatia or the Caribbean, only to see the horizon slowly wiped out by a larger and shinier yacht pulling up at the next berth, with a pop of Champagne and a cocky “dobryj vyechyer!”

If the superyachts themselves are growing at a rate of knots, the asset class is too, with 298 of the things sold in 2016. A superyacht is traditionally defined as any motor or sail yacht with a load length of 24 metres or more. But as the yachts have evolved, the smallest tend to be 30 to 40 metres (these will set you back around €20 million).

Yachts as long as 100 metres are increasingly common. These are, of course, dwarfed by the world’s current largest, Azzam, which measures a ridiculous 188 metres – nearly as long as the Dover to Calais ferry. Cost: $600 million. 

“I remember the school 100 metres sprint, and it’s a long way,” says Edward Leigh, Director of Aviation and Yachting at Equiom, which provides fiduciary services for $4bn of yachts and aircraft.

“But you can’t just judge these yachts by their length, it’s the volume of the vessel too. The features may seem nothing out of the ordinary, but putting them on a floating vessel incurs a great deal of expense.”

Nothing out of the ordinary? Helipads have become so common on superyachts that some owners have started installing two. Some have submarines; others ice-breaking capabilities. There are basketball courts and indoor gardens.

Some boast bays within the stern for the tender (the smaller vessel that takes guests ashore) for discreet docking; some tenders are amphibious and can drive people onto the beach. Floor-to-ceiling glass is common, as are infinity pools and large saloons that fit 100 people and can be used for parties – the owner flying in DJs specifically for the occasion. 

“Whatever the owner wants can be organised,” says Bruce Maltwood, Director of Sarnia Yachts, a marine fiduciary in Guernsey. “I’ve heard of some guests on board a yacht asking for a specific brand of vodka, and the owner sending the private jet shooting off from a nearby airport to Russia to bring it back. It makes sense if you can afford it. 

“It’s fascinating – one day I may be on board with a captain in the South of France, then it’s back home to Waitrose and a £4.99 bottle of Sauvignon Blanc.” 

Back in calmer waters

Not that it’s always been plain sailing. The financial crash of 2008 took (some) toll on the superyacht market. Prior to the crash, people were speculatively buying up coveted build contracts in order to sell them on at a premium. After the crash, a lot of new constructions were delayed or cancelled. Many of those holding contracts got their fingers burned. 

“During a period like that, if you’re making people redundant, it’s best not to go out and buy yourself a new superyacht,” says Nick Walker, who heads up Marine and Aviation at JTC Group.

The superyacht market is now thriving, however, sailing at an average of four to six per cent growth year on year, with the 100 metre-plus sector growing at four to five times that.

Walker puts the number of superyachts currently being built at “around the 500 mark”. The world’s wealthy have apparently realised that things aren’t about to get any more stable, so they may as well enjoy themselves.  

“The good yards are full, with a lengthy waiting list,” says Leigh. “We’re also seeing a trend towards people owning multiple yachts. An owner may need one yacht for the Caribbean, one for the Mediterranean and perhaps a smaller third one for shallower waters.”

Maltwood points out that for someone earning hundreds of millions of dollars, buying a superyacht (or three) is “like buying a lawnmower for the rest of us”. A lawnmower being dragged by a trawler-sized ego, of course.

In 2013, the launch of Azzam had the Daily Mail salivating over how it would ‘put Roman Abramovich’s nose out of joint’, because, at 180 metres, it was 17 metres longer than Abramovich’s yacht, Eclipse, which had been the world’s largest from its launch in 2010. 

Azzam’s owner is said to be Sheikh Khalifa bin Zayed al-Nahyan, President of the United Arab Emirates. Right now, the Sheikh will have a jealous eye on reports of Double Century, a 200-metre yacht currently being built for $770 million; and Triple Deuce, a rumoured $1bn construction that, if genuine, will smash all records at a frankly ridiculous 222 metres. 

Riding the waves

There’s a snag with getting so big, beyond where you’ll actually park the thing – the larger the superyacht, the more phenomenally expensive it is to run. The rule of thumb is that the yearly running cost of a superyacht is 10 per cent of the purchase price. Payroll alone can be in excess of €1 million a year, with some captains getting €25,000 a month cash in hand – and the crew tends to be employed year-round just in case. 

“A full crew will keep the boat fully provisioned on the off-chance the owner wants to use it,” says Maltwood. “I have a friend working on a very large yacht. The owner said he may come next week, so to get everything ready; then he changed his mind, and now the crew are living on steaks and lobster.”

There are plenty of other costs. “An 80-metre yacht would probably cost around €5 million a year to keep going,” says Walker. “Other costs include fuel, harbour fees, maintenance, communications, and food and supplies. This is a significant amount of money.” Indeed, a new paint job, due every few years, will likely cost €1 million alone. 

And how do people pay for superyachts in the first place? According to Leigh, most sell for between £5 million and £10 million, less if pre-owned, so are within the reach of those with more modest amounts of wealth. Many owners choose to buy their yachts outright without financing: the low ratios being offered by banks means it’s not pertinent. 

Chartering

There are other options for getting involved. The most popular route is chartering, at the cost of around £1 million a week for a large yacht. This is also a good way to try before you buy. Fractional ownership, where various people own a share in a particular yacht, hasn’t taken off as it has with private jets – yachts are more of a personal toy, so aren’t so easy to share. 

Yet according to Steve White, a former superyacht captain, only three per cent of the world’s high-net-worth individuals are involved in yachting. He believes he’s found a new way to lure them in. He’s co-founder of Maha Yacht Club, a new members club model offering ‘smarter yacht ownership’.

It takes fractional ownership and removes what White describes as “the bad parts”. Users pay one fee for 10 years of access to a fleet of custom-made yachts positioned in various desirable spots around the world. 

“This way they can enjoy a yacht and the luxury standards, but without a crew talking to them about refits and the upcoming winter programme,” says White. “A lot of people like the idea of ownership as a path to freedom, but aren’t able to see the value of the expense.”  

Perhaps you needn’t be Roman Abramovich or Sheikh Khalifa bin Zayed al-Nahyan to chart your course away from the stresses and the masses. However, owning a superyacht may not be quite as stress-busting as it sounds – according to the Daily Mail, Abramovich’s Eclipse has its own missile defence system. Suddenly that £4.99 bottle of supermarket plonk doesn’t seem so bad.