Tuesday, August 14, 2012

August proves Summer isn't slow for Everyone

Gilman Yachts has kept quite busy this Summer. Proving that there are buyers out there and they are getting great deals.
Wayne Cannava recently assisted his clients to take delivery of their new 82' Viking Convertible that was launched this month. She is stunning, loaded and ready to fish. You'll surely see her at the next tournament.
Wayne seems to be the new build broker here at Gilman. Another client has just signed contract for a new build 80' Horizon that is due to be delivered March 2013 following a visit to the yard in Taiwan.
Jeff Stanley is pounding away at the pavement signing three new boats for sale:
  • SWEET WILLIAM - 65' Johnson 1995 asking $475,000.
  • X SALANT - 47' Sea Ray 2008 asking $499,000.
  • METALICIOUS - 42'6" Jersey asking $115,000.
Joe Majcherek this week just sold KOKOMO. A 69' Real Ships Expedition vessel that will be taking her new owners around the world.
A recent quote from BoatInternational.com's July 2012 Market Report regarding brokerage sales says this, "We were told of 25 brokerage boats sold in July, a steady sales tally showing a modest increase on the 17 sold in June. July’s highlights included two Feadship motor yachts, the 46m 1986-launched Highlander and 1987-launched, 43m Kingfisher.
A year ago in July the figure was 29 – four more than this July. At that time, sales were tailing off from a notable Q2 high of 99, a figure not seen since the GFC and not repeated this year. Indeed, 179 boats were sold by the end of July 2011, compared with 143 sold so far this year. In hindsight it seems more and more as if 2011 was an exceptional year, rather than the beginning of a strong, long-term trend that would take the industry back to solid ground.
But if we look at this year so far in the context of the last few years, 2012’s sales figures don’t look so bad. This year’s 143 sales beats the 125 sold in the same period in 2010. Also, while brokers in our H1 market report said that the first quarter of 2012 was considerably better than the second, we no longer seem to be experiencing the violent highs and lows we did before 2011."

If you'd like some more information on any boats we have or questions regarding purchasing or selling, call us or email us. We'd be happy to answer any questions you may have.

Tuesday, July 31, 2012

First Half 2012 - Market Report

By Caroline White - Boat International

Sometimes the brokerage market seems like a once-carefree ingĂ©nue who had a rather nasty accident in late 2008 (probably on a glamorous mountain road, with an unscrupulous trader at the wheel). Since then, yacht brokers have administered health-boosting sales, monitored her condition and occasionally turned to us journalists to whisper sober judgements or report that she’s perking up. Because the numbers of superyachts sold or ordered are so small, figures often fluctuate significantly from month to month, making it difficult to form a coherent picture of the state of the market – but taking the first six months of this year, as we do here, will give us a clearer view. At first glance the prognosis isn’t good.

‘This is the toughest six months we’ve had since the original crisis in 2009,’ says Toby Maclaurin, commercial manager of Ocean Independence. Frank Grzeszczak, a broker at IYC meanwhile says, ‘This time last year I was way ahead of today and generally from what I see, sales are way down this year.’

Our statistics back up a negative general outlook, with 119 superyachts sold in the first half of 2012, a 24 per cent drop on the 156 in same period of 2011. But the first half of 2010 was worse, with 108 sold, and the 74 sold in the first half 2009 is still unmatched in grimness.

The timing of this year’s sales is vital to understanding why they are disappointing. There is usually a sales spike in the second quarter of the year, but this year it was more of a thumb tack – a jump from 55 to 64, compared with 2011’s 56 to 97.

33 of the 92 superyachts sold in the first half of 2012 were from Italian yards

‘The first half of last year was slow, the second half was great, the first quarter of this year was great, and now the second part is slower,’ says Wes Sanford, a broker at Northrop & Johnson. ‘There was a 12 month run where the market seemed to have picked up. In the middle of the second quarter it slowed down a bit, we didn’t have that same uptick that we did last year. Boats are still selling, but it’s not super strong.’

Hein Velema, CEO of Fraser Yachts, has had a similar experience. ‘I was happy January, February, March and April, that was all positive and comparable with last year,’ says Hein Velema. ‘May and June were disappointing. And May and June are normally the peak months.’ This is the crux of the concern – if the peak months are subdued, the year’s sales as a whole are likely to suffer.

Uncertainty

So what factors are responsible? The resounding reply from brokers is uncertainty. ‘There’s even more uncertainty about the future economic stability of just about everywhere than there was even in 2009,’ says Maclaurin. ‘In 2009 people were talking about the crisis. Now when people talk about the crisis you almost feel like saying, “Well, which crisis?” because there are now so many of them.’

The largest superyacht to be delivered in the first half of 2012 measures 96m

Sanford believes it is a psychological issue rather than a material one: ‘a year from now the clients will probably still have the money to buy a boat, that they have today, but the uncertainty is enough to make them pause.’

Velema agrees: ‘there’s not a lack of money. But it’s really their opinion about what the economy is doing, the worry about where we are heading is what makes people hesitant.’

Given that the most acute economic uncertainty currently hangs over the Euro, it seems likely that Americans would feel more confident about buying. Indeed, Velema has found the US section of market is a little healthier than the European this year. ‘We are doing a little but better in the US, that is more positive I’d say than Europe. And what I’m really happy about is the West Coast that was almost completely dead for years, is now getting better. That’s more smaller boats I have to say, but still, they’re getting out of a very deep hole. We had a much stronger recovery in Europe in 2010/11 than in the US, but that is now falling back, and at the same time the US has finally come up a little bit.’

Sanford, who is based in Fort Lauderdale, agrees that, ‘right now it seems the strongest part of the market is American’. But while the problems surrounding the Euro don’t worry his American clients as much as his European clients, ‘most of these guys have exposure around the world so they’re paying attention to it.’ And Americans have an extra factor to contend with. ‘We have an election here in the US, which will affect some clients,’ says Sanford.

Sales trends

‘The thing that seems to have changed for 2012 is that middle bracket, 30-50,’ says Maclaurin. ‘It’s where in our market you normally see the bulk of the sales and it’s really suffered.’

‘We were quite relieved 12, 18 months ago when it seemed some of the banks were returning to yacht financing again – they exited in a hurry. So yes they have come back, but their terms are quite difficult to swallow. Some banks are saying “yes we will finance your yacht purchase, however we want your entire wealth portfolio with our bank”.’

Our figures certainly show a drop in this bracket from the same period in 2011: 67 30-50 metre yachts were sold in the first half of 2011, but 40 in the first half of 2012; 25 40-50 metre boats were sold in the first half of 2011, and 22 in the first half of 2012. But even given its year-on-year slip, the 30-40 metre bracket is still among the top sellers – with only two boats fewer than the top 24-30 metre bracket.

‘This [30-40 metre] bracket is easier to afford for a larger group of people, also in operating costs,’ says Velema. ‘People that used to have a sporty type of boat [which he says still aren’t selling] now want to go to a displacement. They go from a big Mangusta into a Benetti classic or something like that.’

In terms of smaller superyachts, while the sail market in general isn’t fantastic, Maclaurin has found that sailing yachts of 30 metres and under are moving. ‘It could be to do with the profile of the buyer, maybe slightly more conservative people, who would probably buy out of cash rather than borrow,’ he says. ‘If you’ve got a well priced sailing yacht of good pedigree, in good condition, I think you’re better placed than just about anybody at the moment to achieve the sale – unless you’ve got a 60-70 metre recently built motor yacht, which you’re prepared to let go at a price buyers are willing to pay today,’ he says.

Price updates

All the brokers we spoke to agreed that across the world, far above type or size, the most important factor in sales was value. Sanford describes buyers as ‘value driven’, Grzeszczak says they are ‘deal orientated’.

The biggest reduction in the first half of 2012 was the $12.8m taken off 58m Bakara in January

‘There was a massive spike in the spring with the number of price reductions,’ says Maclaurin. ‘Some of them have really been very big, into millions – our central agency Reverie was reduced by $10 million dollars in one go. It’s only now that brokers have been able to provide some solid stats, where we’ve been able to turn round to an owner and say “this is what’s been happening over the last two-plus years, so we’re not making it up, this really is fact.”

He believes that the spike occurred in May because brokers advised clients that ‘it looks like we’re not going to sell this year. If we’re going to do something about it, now is the time.’

Velema has found the difference between original sales prices and actual selling prices – ‘you don’t know that, but I do’ – are very revealing about the new pricing landscape. ‘Boats are sold for just under 25 per cent less than the last asking price, or 36 per cent less than the original asking price. It was about 45 per cent lower than the original asking price last year. My conclusion is that now when people put a boat now on the market, they price it a little bit lower at the beginning.’

New orders

There were 48 new orders in the first half of 2012 – the same figure as in the first half of 2011. At 16, the 40-50 metres has been the most popular bracket and there have been eight new orders of 70 metres or more this year (including a 147 metre) – there were ten 70 metre-plus orders in the whole of 2011.

‘Even when the market was good if someone wanted 75, 80 metres-plus the number you had to choose from was really quite small,’ says Maclaurin. ‘They seem to build their own and they seem to keep them for a very long time.’

Grzeszczak has found US yards quiet this year and only six of this year’s new orders are with American builders. ‘With the Euro coming down from where it was, to build in the US now is going to be less attractive for Europeans,’ he says. ‘As the Euro goes down it’s going to be more attractive for Americans to go to the European market and buy.

This only seems likely to exaggerate an existing trend – Americans are much more likely to buy European boats than vice versa, largely because the classic styling popular in the US doesn’t sit so well with European clients.

But Sanford believes this is changing: ‘The American market follows the European market and is coming around more towards the modern look. You’ll see a lot more boats now that are a little bit more modern in style from an interior perspective. It does make it more interesting if, in an attempt to open that market, builders are trying to appeal to that.’

There were only 5 orders for yachts between 24m and 30m in the first half of 2012

Grzeszczak agrees: ‘We’ve got younger blood coming into the industry and a lot of very young billionaires have come along who seem to like the minimalistic European look.’

New markets

Brazil’s economy is still ‘booming’ in Grzeszczak’s words, and sales continue. He believes that China ‘is not there yet and it’s going to take a few years to happen,’ although there is some activity in the 50 plus market now. ‘From the 50 metre boat I sold there last year, I found that they don’t grasp ordinary expenditures needed to maintain a yacht.’

Velema agrees that the vast cultural differences are a stumbling block. ‘A Brazilian client understands the concept of Saint-Tropez much more quickly than the average guy form Beijing,’ he says. ‘They want corporate entertainment and that’s much more the goal of having the yacht.’ But he adds: ‘I was always sceptical about China, but I’m slowly changing my mind. We are now developing quite a good network there.’

Charter

‘While charter was not all-guns-blazing we are fortunately experiencing something of a last minute rush, which has come even later than in previous years,’ says Maclaurin, who is also president of the Mediterranean Yacht Brokers Association (MYBA).

He points again to uncertainty, this time caused by tax issues. ‘A large part of summer charter happens in Italian waters and our Italian friends scared the living daylights out of people with the berthing tax, which fortunately they made much lower and more local,’ he says. But there are also on-going tax problems for charter. ‘The second one has been VAT on charter hire. It’s not that some tax is due on charter hire, it’s that the interpretation of the law is so unclear as to what rate actually applies and the confusion and the bureaucracy of actually being able to pay the tax. Everyone’s been screaming out for MYBA to offer some advice, and the answer is “Look, as soon as we can find two lawyers or tax experts to agree on an interpretation of the law, we’ll publish some advice.” It’s that bad.’

42 yachts between 24m and 30m were sold in the first half of 2012

Velema has found that while charter has seemed positive this year, owners may not be feeling the benefits as much. ‘The number of charters booked is good. But with every boat delivered by a yard now there’s another boat on the charter market. So the charter fleet is still growing, while the charter market I’d say was at the level of 2007. If you ask a yacht owner how charter’s doing, he will complain. He doesn’t get the number of weeks sold that he could get in good years.’

Indeed, Sanford notes that in general the sales market is similarly over-stuffed. ‘The one scary thing is that we probably have seven to eight years of inventory in certain segments of the market now and there are more boats being listed than are being sold on average in recent months.’

But Sanford also notes that conversely, ‘since so many sellers are not desperate to sell, that is a sign of strength for the market in itself.’ And given the economic and political headwinds the market is facing this year, she is showing resilience. It looks like there’s life in the old girl yet.

Thursday, July 12, 2012

Famous Boat Spotting!

While on a trip to preview a boat, Jeff Stanley got a chance to see a piece of history in Key Largo Florida this past weekend!


"African Queen" was the original boat used in the famous movie "The African Queen" (ranked the 17th greatest movie of all time) starring Humphrey Bogart and Katherine Hepburn.
She was built in Lytham, England in 1912 and in a narrow way to navigate Lake Albert and was used to carry mercenaries, missionaries, cargo and hunting parties on their voyages. Now, African Queen is available to the public and for private events.


African Queen in on display for free at The Key Largo Holiday Inn in Florida.


For more information click below:
http://www.africanqueenflkeys.com/


*AfricanQueenflkeys.com

Tuesday, July 3, 2012

Wayne Cannava goes to Taiwan

Wayne just returned from a trip to Taiwan to attend Horizon's 10-day Open House at their yard. The event was wonderful and Kaohsiung & Taipei were hot!
Wayne was able to tour the entire yard including boarding yachts on display and meeting key facility personnel to experience exactly how their operation is run.  
Top three most memorable aspects of his trip were the cleanliness and organization of the yard, professionalism of all personnel Wayne dealt with while at Horizon & the noticeable progression of the fit and finish of their product.

He was accompanied by his client who just recently signed contract for a new build 80' Horizon. Check out the photos! Beautiful scenery & mopeds were definitely not lacking!

View out of W Hotel in Taipei



Horizon Open House








Welcome to our blog!

Gilman Yachts Sales is a full service yacht brokerage. We have strategically modernized our corporate infrastructure to better guide our customers to successful yachting adventures in the 21st century.

Through this approach, we maximize our potential by encouraging our brokers to focus on their preferred market. Together, we share a powerful camaraderie that results in a detailed knowledge of comparable sales and industry trends.



We look forward to sharing all our stories, experiences & news with you as well as your feedback!



Smooth Sailing,

Gilman Yachts