No room at the inn
The Superyacht Group is set to embark on a comprehensive investigation into the potential for growth in berth ownership and its growing necessity. …
In the past few months, there have been a variety of conversations and meetings among the Superyacht Intelligence team and some of the major owners, operators and investors in the marina sector, all trying to explore the market capacity and potential for marinas to change their business model and increase the demand for berth ownership. Primarily in the Mediterranean, we have seen some logjams and increased demand for key berths in the more popular destinations, coupled with the imminent arrival of concessions being available for investors, in regions like the South of France. This activity and insight has certainly made interesting reading and will form the basis for a variety of research projects and intelligence we are gathering over the coming months.
What is currently hard to understand is how the market reacts to this demand supply equation and whether the owners, captains and managers are concerned about the availability of berths in the longer term. As we complete the research and validation of our market data for our Superyacht Intelligence Annual Report (New Build) and make our forecasts and predictions for the next 10 years, it is easy to map out the trends and growth of the market and see that several hundred new yachts will enter the fleet between now and the middle of the next decade. Obviously, with the fleet numbers expanding and the cruising patterns not shifting as much as perhaps people expect, we will no doubt see an increased demand on prime berths in the popular Med based destinations, the South of France, Ibiza and major wintering hubs around the Med, like Barcelona, San Remo, Genoa and some parts of the Eastern Med, once the political situation calms down.
So we feel it is key to understand what the reasons are and why berths are just seen as parking lots and not opportunities. As the fleet grows and owners and charterers say, I want to berth here or there, or if owners say, we’re not going to use the boat this winter, let’s park up in the most logical hub available, it may end up being another source of frustration if the congestion creates berthing pains.
We have seen, over the past decade, some considerable investment in new marinas and a significant upgrade in services and facilities, with a handful of six star developments emerging in the superyacht marina sector, like Porto Montenegro, Palmarina in Bodrum, Port Adriano and Vilanova Grand Marina in Spain and probably the new benchmark, One Ocean Port Vell in Barcelona. This level of investment is only really sustainable if owners understand the need for planning and management of these facilities, if they are just seen as expensive parking lots and therefore treated as such, where you try to get in, but if their is no space, the sign flashes up 'Lot Full', you can hardly blame the marina owners.
But if you consider the number of larger yachts coming on stream and likely to continue to arrive in the market, the problem of where to park may become the next big headache. However, as with any demand supply equation, there is opportunity…if the market demand is strong for prime berths and the fleet is growing, then perhaps now is the time to explore the investment opportunities in berth ownership. Not only does this guarantee your own berth when you need it, but perhaps there is a good rental return to explore.
Consider the fact that an owner may invest anything from €50m to €200m on a new build, yet he/she takes a chance on where he can park the pristine project, maybe the new era will force owners to buy a berth before he buys a yacht, as one may actually attract a premium or grow in value where as the other will continue to depreciate. Even with a rule of thumb of 5% of the value of the yacht being invested in acquiring a berth, over the 5-10 year ownership cycle you may in fact see a cumulative saving over constantly renting berths and you are more than likely generate some extra income when you’re not in port.
Over the past few months we are seeing more and more marinas, marketing berths for sale and therefore we wanted to understand what the reason is that clients have not yet invested in berth ownership for their floating real-estate and try to explore what the appetite could look like, as the demand equation shifts even further. I think if the market for berth ownership did expand and become a robust market place, it would allow and attract more investment into the marina sector and an upgrade in the service, support and home port proposition. So we ask those of you who are interested or have something to say on the matter to take part in a very straight forward survey, to try to understand if there is a Market for Berth Ownership.
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