Plain sailing

PUBLISHED : Tuesday, 27 November, 2007, 12:00am
UPDATED : Tuesday, 27 November, 2007, 12:00am

All kinds of graphs and coefficients can be used to track the relative health of Hong Kong's economy, but one of the most visible and reliable of these is the number of new luxury yachts berthed at local marinas.

'It is a strong indicator and, for us, the market is better than it has ever been,' says Mike Simpson, managing director of Aberdeen-based Simpson Marine.

'People tend to buy yachts when everything else has been taken care of. They are seen as a symbol of success and, at the moment, in terms of sales volume, there is good activity all the way round.'

This extends from motor-powered sports boats, which appeal to younger executives and well-paid professionals, to racing yachts, catamarans, and top-of-the-range super yachts, which epitomise the ultimate in seaborne extravagance.

Mr Simpson says that the United States-manufactured Sea Ray class and the French-built Beneteau range are among the most popular for entry-level owners.

The Sea Ray class includes an 18-foot model with a 135 hp inboard engine, suitable for water-skiing and wakeboarding, and the 50-foot 47DB, billed as ideal for entertaining and family cruising. Beneteau's range goes from a starter 24-foot sailing yacht to 50-foot-plus racing models, which are attracting interest from both local and expatriate buyers.

'You're looking at prices of around US$20,000 to US$30,000 upwards which, with financing, should be no pain at all,' Mr Simpson says.

Vic Locke, owner of Jade Marine, confirms there has been a surge in inquiries and orders since June. He has the local agency for German-made Bavaria brand sailing yachts, which can cost up to HK$3million, with a tailor-made keel, rig, sails, spinnaker equipment and various hi-tech gadgets.

He says the annual cost of running, maintaining and insuring any luxury boat are about 10 per cent of the original purchase price. 'Typical buyers have made their money and are looking for ways to enjoy it,' he says.

At present, his major concern is simply keeping pace with demand for both new and second-hand boats, while recognising that certain practical constraints are looming.

'The Royal Hong Kong Yacht Club is seeing a lot of interest from potential members, but it is now approaching its theoretical limit on moorings,' he says.

Meanwhile, standard berths at the Aberdeen Marina Club, going from roughly HK$9,700 to HK$52,000 a month, are already full, and Hebe Haven in Sai Kung is said to be fast running out of space.

Noting this, Miles Clark, a yacht broker with Seanergy, which sources mainly second-hand yachts from overseas, says some owners have already considered alternatives.

'The majority [of boats] are staying here, but a few are taking them to Phuket,' he says.

Recently, buyers have been coming in 'in droves', with most interested in yachts of anything between 50 and 100 foot.

In this category and above, Italian brands are perennial favourites, and give owners the opportunity to throw financial caution to the wind.

'These are really the castles and palaces of the modern world,' Mr Simpson says. 'A big yacht like this is a statement, telling the world 'I've arrived'. You can show off a bit and be as flamboyant as you like.'

The Azimut116 costs roughly Euro10million (HK$113million) and the list price for the 115-foot Benetti is Euro13.25million, but that just covers the 'basics'.

For this class of super yachts, customisation is the norm and might begin with the owner appointing a designer to work with the shipyard and advise on the choice of exotic marble, fabrics, interior decoration and fittings.

Then there is the whole range of owner-supplied items, such as crystal, porcelain, silverware and perhaps even an art collection, to consider.

'When you have a beautiful yacht, you have to get into the designer world with Christofle, Limoges and the like,' Mr Simpson says. Of course, the bigger the yacht, the greater the choice of 'essentials'. And nowadays, for anything over 150 feet, that could mean having a mini-submarine, theatre, hi-tech surveillance systems and a helipad on board.

'But besides choosing the yacht, the choice of captain and crew is the single most important thing,' Mr Simpson says. 'If the owner buys from us, we go to some lengths to find a captain who is a good fit.' He explains that when it comes to issues of safety, the captain cannot be overridden, but a key part of the job is to create the right atmosphere on board, depending on the guests and the occasion. 'I have seen too many owners put off boating by a tyrannical captain.'

He adds that most trips in Hong Kong still tend to be 'out and back' because of the restricted cruising area and limited range of most craft, but suggests that may change soon. Mainland coastal provinces have differing requirements and procedures for obtaining licences, registration and cruising permits. In many cases, they are both time-consuming and opaque.

However, the mainland authorities are known to have studied the standard practices in other countries and are drafting a new set of national regulations, designed to provide clarity and consistency.

'There is a lot of interest with big yachts wanting to come over for the Olympics,' Mr Simpson says. 'A change in legislation would open up cruising on the China coast and give the market a big boost.'

He says he is also encouraged to see the efforts being put into establishing a genuine yachting culture in the mainland. These include substantial investment in new marinas from Dalian to Hainan, organising regattas, and setting up well-equipped sailing schools. 'You don't create a yacht market with one or two sales to very rich individuals,' Mr Simpson says. 'You have to build from the ground up.'