Company Expansion

Cashed-up mainlanders now want boats, planes

PUBLISHED : Saturday, 08 May, 2010, 12:00am
UPDATED : Saturday, 08 May, 2010, 12:00am

Never mind luxury flats and expensive cars. The next big things for mainlanders with cash are yachts and private jets. And there is plenty of money for both, traders say.

About two years ago, fewer than 10 per cent of Joe Chan Chi-wan's clients for luxury craft were from the mainland. But the manager of Master Yachts says the figure has soared to about 40 per cent and is rising so rapidly that the company plans to open a branch on Hainan Island .

'Some mainland buyers are so rich and generous that they don't even need to see the actual boat before buying. And they will say 'we need no discounts',' Chan said.

Tens of millions are also being forked out by mainland tycoons who prefer private jets to flying on commercial aircraft.

Justin Firestone, president of Asia-Pacific sales at Hawker Beechcraft Corporation in Hong Kong, says six mainlanders have bought the US$22 million Hawker 4000 business jet in the past two years.

Chan said demand for luxury yachts was fuelled by luxurious new residential projects in coastal cities that come equipped with yacht clubs and facilities.

One of Master Yachts' most recent mainland clients was a businessman from Tianjin in his 40s who suddenly decided he wanted to go fishing. He bought a HK$5 million craft after taking one look at photographs of it. Other mainlanders spent HK$10 million to as much as HK$100 million for a yacht.

Clients include companies that regard a yacht as essential for receiving clients or to give them prestige at promotional events.

'The mainland is a mouthwatering market for many foreign boat manufacturers,' Chan said. 'Seeing the strong demand for luxury cars in China, people are saying that the next wave will be yachts.'

The soaring demand has also fuelled a boom in the number of yacht traders from seven a few years ago to about two dozen now.

One of the newcomers is Jebsen Marine, which was set up two years ago. General manager Lars Petersen said the mainland market was growing, with marine infrastructure being developed to support the sector. 'The increasing number of wealthy Chinese will drive this market, as will ancillary industries like coastal property development,' he said.

Jacky Cheung Yat-yeung, owner of Smart Concept Craft, said mainlanders liked to buy yachts through Hong Kong agents because the market was more developed and the city was known for the quality of its goods and services. 'Mainland investors learn more about yachts as they migrate to or station in Hong Kong when their companies get listed here. They want to adopt the lifestyle of Hongkongers,' he said.

According to figures from the Marine Department, the number of licensed pleasure vessels, including luxury yachts and motor boats, in Hong Kong has surged gradually from 4,200 in 1999 to 6,473 last year.

As yacht clubs in Hong Kong are nearly full, Cheung said it would be difficult to expand the business within the local market.

A two-day boat show opens at the Gold Coast Yacht and Country Club today. The organiser said the annual event was the largest this year since its launch 13 years ago, with 55 exhibitors taking part and featuring more than 70 boat brands.

'The boating culture in mainland China is fast developing and we have seen more visitors from there in recent years looking for sizable luxury yachts and one-stop berthing facilities and services in Hong Kong,' club general manager Albert Wu said.

Firestone of Hawker Beechcraft said the advanced super-midsize Hawker 4000 was very popular despite the price. He said many customers placed immediate orders, often with no need for bank financing.

Firestone said mainland buyers included people in the import-export and biomedical businesses.