Smooth Sailing in times of Global Depression

Maybe the adage 'the rich keep getting richer...the poor keep getting poorer...' is truly a fact.


While the global economy may be on a slump or even sliding due to a slippery surface filled with oil...yachts are hot!

GLOBAL ISSUES

The oil barrel keeps getting more and more expensive by the passing moment, and the financial markets have their mood-swings...most of the markets for consumer goods seem to be having a real bad time.

Ironically, the super-rich are still lining up to pay tens of millions of dollars for mega yachts.

THE NEW RICH

The well-heeled buyers of the floating mansions are increasingly coming from emerging economies - in the Middle East, Russia and South America. The source of their wealth runs the gamut - technology, venture capitalism, new industries. And, yes, oil.

"There are a lot of people with new wealth looking for relaxation and enjoyment," said John Dane III, president of privately owned Trinity Yachts, the largest U.S. builder. (Source)


The biggest problem at Trinity's shipbuilding yards is having enough workers to handle the 24 custom contracts the company currently is working for the luxury vessels.

Nobody is buying these yachts because they need them, they're buying them because they want them.

There have been builders who have had to double their productions compared to last year...and at the same time this has led to doubling of their profits too.

INDUSTRY TALK

According to Camper & Nicholsons International, a broker of yacht sales and charter contracts, there are about 3,800 yachts over 80 feet in service around the world now. About 1,800 of those have been built since 2000. The study predicts that that by 2010, there will be 5,000 such yachts on the water.

"There's not enough supply," said Ed Slack, editor of International Boat Industry. "It takes two years to build some of these yachts and the demand hasn't slowed down."

So far, Trinity's largest vessel has been a 192-foot yacht that would carry a replacement price of $60 million to $65 million. The company is working a 242-footer that will have a price tag in excess of $90 million.

In the Netherlands, the First Export Association of Dutch Shipbuilding, or Feadship, can put together a 128-footer for about $40 million. On the upper end of an already high scale, a 300-foot monster yacht typically will run around $150 million.

Francois van Well, chief executive of Feadship America, said about 50 percent of his company's business comes from the United States, but more buyers are coming the rest of the world. And it's not old family money.

"Most of our clients have earned their wealth in one generation," van Well said.

CHARTERS AND MORE...

Enter the charter business, especially in the Mediterranean where, according to Dane, a 164-foot yacht can easily bring $350,000 a week. By chartering a boat 10 weeks a year, the owners can pay operating expenses for a full year, he said.

"The charter market has allowed people to buy boats a little larger than they would have wanted to invest in had they not seen it as a source of revenue to help defray their operating costs," Dane said.


And these vessels don't depreciate in price.

Dane said the first owner of every Trinity-built yacht who decided later to sell got more for it than the purchase price. Three were sold by the original buyer even before they were delivered.

"We have one owner and this is his fourth boat and he's never taken delivery," Dane said. "Rich people don't want to wait on a boat and they'll pay a premium. This owner has taken that premium and moved to the back of the line."

Hence...not only the size of the super-yachts are getting bigger and bigger day-by-day...but also...there are more of these beauties to feast our eyes on expected in all our harbours soon...
Read more...

The Green Boat Effect: Teak, India And The Rise Of Boating

Teak is one of the strongest and most durable hardwoods in the world. Known as the “King of Woods”, Teak is one of the most desirable and endangered woods. Considered by mariners to be the most valuable and versatile hardwood, its rare beauty, its rich golden brown luster, its decorative grain and its unique properties of strength, stability, and resistance to wear have made it the most demanded wood for marine use.






Teak is found naturally in only four countries in the entire world. Burma, Thailand, Laos and India each have varying amounts of natural teak forests. Because of its strong demand and limited supply, Teak is in desperate need of reforestation projects worldwide.

Investment possibilities with Teak plantations

Many companies are anxious to invest in Teak plantations and reforestation projects because potential returns are enormous. As the worldwide supply of Teak dwindles, the prices of this exotic wood will continue to rise. As the prices rise, the investment opportunities in Teak plantations will continue to be available. The time for these opportunities is now; because of the time involved to establish new Teak plantations, it is important start now.

Consider this example of a reforestation project. During the lifespan of a tree in a Teak plantation, the first harvest occurs at 12 years, and is cut in rotating cycles as the tree, once cut, re-grows up to 3 times. If the trees are planted in a 3 meter X 3 meter quadrant, thinned, and maintained properly, a hectare of Teak trees in a reforestation project at the current market prices will yield gross income of over $475,000 in 20 years. It is projected that plantation set-up and maintenance costs would be approximately $17,000 per hectare the same 20-year plantation, with the figure adjusted for inflation.

The Green Boat Effect:

Imagine this. The yachting trend in India is picking up. So is the Boat-building industry. If mergers with advanced technologies of the international world are projected, India can become the future world boating destination. Right from Material to Manpower and Manufacture to Maintenance.
With an opportunity like teak reforestation, some carbon credits would definitely speed things up! What do you say?

Share Your Thoughts Please.

Read more...

Donate A Boat ! Check Out Charities Check-In Savings

Imagine getting tax deductions from an old yacht, boat or trailor that’s not even in a working condition! It’s true. You can donate your boat to a charity and benefit on tax savings while helping out others too. One such program is offered in the United States by BoatAngel.org
BoatAngel makes all the arrangements to pick-up your boat, yacht or vessel at no cost to you. You can receive the full fair market value as a lawful IRS tax deduction for your boat.


Avoid all the headaches of selling a used boat -- there are no expensive want ads, no taking phone calls, no showing the boat, no price haggling... BoatAngel will arrange to pick-up your boat donations anywhere in the United States. They supply you with the necessary legal paperwork so you can claim your tax deductible charitable vehicle donation.

How It Works
Through innovative partnerships and vehicle processing, Angel Ministries is able to convert your boat or yacht donation to significant value for charities. The process is simple:

Either call at 1-800-227-2643 or fill out the form online at boatangel.org
They send out a receipt via email and package in the mail with a form and a disposable camera so they can get pictures of the boat. They get the package back from you and list it at charityboatsales.org Your boat is picked up in 6-8 business days. If it doesn’t sell, then BoatAngel will pay to have it stored!

Choose a Charity you want to benefit from the donation of your old yacht, boat or trailer:
A portion of the charity can be donated to the following. Churches, youth groups, building programs, cancer programs, aid and relief societies, educational programs , international relief programs, animal rescue foundations, diabetes research, lung cancer research Alzheimer research computer education, scholarships for both secondary university and graduate degree programs bible distribution and printing, book distribution and print educational material development, media production and distribution and vehicle giveaway programs are normally approved..

The site funds programs that give vehicles away to needy students and families. Many vehicles meet the giveaway requirements and will entitle you to receive a full blue book value when they are given away. Drawback to the vehicle qualifying for the vehicle giveaway programs can be the age mileage and overall mechanical condition.

Read more...

Measuring the Wealth of Nations with Yachts !

The Golden Question - When are we going to have a yacht that is worth ONE BILLION US$s ??! With the way things are moving and the constant battle of the egos between the world's 'super-billionaires', it is just a matter of time that someone will be willing to dish out a precious billion for their sea-worthy 'toy'.

Blohm & Voss, Germany's favourite shipyard, birthplace to many-a-yacht prodigies - has its workers round the clock building a mammoth yacht called the Eclipse. Surely, the owner seems to be giving out a message through its name to other yacht-owners.


Measuring Wealth by the Foot Like many things in the secretive world of superyachts, its exact length is hard to pin down. So is the name of its owner, and the cost of building it.


WHAT"S THE SIZE?

But according to the Web site of The Yacht Report, one of several publications that track yachting with the same intensity that gossip magazines cover Hollywood hunks, the Eclipse is 531.5 feet long. Others like www.CruisingYatch.com go one step ahead and claim it to be a 550 feet mini-ship. It would not be surprising if it is like many super-structures (towers and skyscrapers) on land nowadays, where the height is flexible - so just incase your competitor claims a height, they go out and better it by a few metres.


Likewise, that’s six and a half feet longer than the Dubai, an 11,600-ton behemoth that now holds the record as the world’s largest yacht. Its owner is the ruler of Dubai, Sheikh Mohammed bin Rashid al-Maktoum (covered gloriously on this blog, click on Dubai in the Label Cloud).

The extra length on the Eclipse surely isn’t an accident. Supersized yachts are the latest examples of one-upmanship among billionaires, many of whom already own a private jet, a fleet of Rolls-Royces, and multiple mansions from one end of the world to another.

With the fear of a global economic recession and unrelenting job pressures among those who remain yachtless, there’s still a lot of money floating around the world and always will be. And as the superrich get richer, the size of yachts grows bigger and bigger, too.

Many feel that when a yacht is over 325 feet, it’s so big that you lose the intimacy that yachts carry. But considering the bragging rights you get it seems like a good pay-off.

Who will be the one to wrest bragging rights from the Sheikh? Blohm & Voss, isn’t saying. According to the grapevine, it is being built for Roman Abramovich, a Russian tycoon.


Mr. Abramovich already owns the 282-foot Ecstasea and the 377-foot Pelorus, and Web sites that track yachts speculate that he may be the owner of a new 394-foot yacht called Sigma that resembles a battleship. A spokesman for Mr. Abramovich declined to comment.

PAST DEVELOPMENTS AND FUTURE TRENDS

Just four years ago, when Lawrence J. Ellison, the chief executive of the Oracle Corporation, took possession of the 454-foot Rising Sun, he gained crowing rights over Paul Allen, the Microsoft co-founder. Mr. Allen’s yacht, the Octopus, is relatively minuscule at 417 feet. (Since then, David Geffen, the Hollywood mogul, has bought a 50 percent share of the Rising Sun from Mr. Ellison.)

Many yacht owners are entrepreneurs or industrialists, rather than royalty or bold-faced names from Silicon Valley, according to yacht designers and builders.

Like Mr. Abramovich, a growing number of yacht buyers are from emerging markets. There’s an incredible amount of disposable money in the world at the moment, and a lot of money is coming out of new markets like Russia and Ukraine, as well as India. These people have made a lot of money very quickly and have an appetite.

According to ShowBoats International, a luxury yacht magazine, 916 yachts measuring 80 feet or longer — the traditional definition of a superyacht — were on order or under construction as of last Sept. 1, four times the number in 1997. The biggest gains were among the biggest yachts: 47 yachts were 200 to 249 feet long, up 68 percent from a year earlier, while 23 were 250 feet or longer, an increase of 28 percent.

In the early 1970s, a 60-foot boat was considered pretty large. Infact a 150-foot boat was queen of the show in Monaco in 1982. In 2008, surely you wouldn’t be able to find that boat in the marina.

Some new megayachts are so big that they have to dock in commercial ports. The growth in the number and size of yachts is also making it hard to find qualified crew members.

Still, many yacht owners trade in their boats every few years for bigger models.

People want more toys to play with. Gyms were unusual 20 years ago, and no yacht is being built now without a gym. They’re buying two- to four-person submarines, have four Jet Skis and little sailboats stored on board, as well as helicopter landing pads.

It takes two to four years to build a yacht, and prices are rising so quickly that some owners are selling their boats before they’re even finished — for a tidy profit. Prices have risen 10 percent to 20 percent in the past two years alone. He estimates that a yacht 328 feet long would cost about $230 million today, with prices rising to $650 million for a 500-foot yacht.

RECOVERING COSTS

Some owners recoup part of their costs by chartering their yachts. Want to sail the Maltese Falcon, the innovative clipper ship built by Tom Perkins, the Silicon Valley venture capitalist? That will put you back around $539,000 to $555,000 a week, not counting expenses for fuel, food or crew. Or the Mirabella V, the elegant sloop owned by Joe Vittoria, the former chief executive of Avis Rent A Car System? That’s $325,000 to $375,000 a week, depending on the season.

There are no signs that demand will slacken. There are 2,000 superyachts in the world today over 120 feet long, and nearly 200,000 people who could afford to buy them.

"MINE'S BIGGER"

The arms race in yachts echoes the competition among business titans in the last century to build the world’s tallest skyscraper. In his book “Mine’s Bigger,” David A. Kaplan describes the battle between Mr. Perkins and Jim Clark, the co-founder of three Silicon Valley companies, including Netscape, as they competed to build the world’s biggest sailing megayacht.

By the time Mr. Perkins completed his Maltese Falcon, measuring 288 feet, in 2006, it was substantially longer than Mr. Clark’s Athena if measured at the water line.

Mr. Clark could console himself only with the fact that if you included his 33-foot stainless steel bowsprit as part of the length, then his was bigger than anybody else’s.

Mr. Vittoria holds a different record. His 247-foot Mirabella V has a 292-foot mast — so tall that it can’t fit under the Golden Gate Bridge (covered on our blog).

Surely, yachts are a good parameter to gauge the Wealth of Nations, since all developed and budding economies come hand-in-hand with new buyers and an increase in demand of yachts of all types and from all over the world.
Read more...

Marina Boom in India ?

Imagine a super yacht anchorage and water-front entertainment village, a recreation complex for visitors and the residents of the surrounding city. Envision a deepwater port of entry with first-class berthing facilities, a thriving marine commercial park and foreign trade zone, and successful cruise and cargo industries. In yet another sign of the rich getting richer, an increasing number of people are buying pleasure boats. Livemint gets talking to some of the key players in the industry to find out the possibilities.

Ajay Narang, Yachting Association Secretary General
India is likely to attract global attention during the Volvo Ocean Race : the premier round-the-globe yachting event held every three years. Pleasure sailing is on a growth path. Kochi will provide the stopover and the Kerala Government will build a ‘racing village’ across more than 2.5 acres, complete with accommodation for sailors, officials and more than 700 back-up personnel for the seven teams, a food court, theatre for cultural shows, and a nearby guest house complex for an expected 20,000 domestic and international tourists.

Shakeel Kudrolli, Aquasail
Mumbai doesn’t have ‘good water quality’, the sea is choppy and the tide strong, and dredging can prove prohibitively expensive. Owners of yachts and smaller pleasure boats can dock their vessels in Goa, and plan their vacations around sailing.

Phiroze Contractor, MD, Ava Marine
All of a sudden, all these boats are being imported, we are overflowing, we have run out of space. A proper marina will save space, more vessels can be accommodated, and docking made easier, reducing damage. Other advantages: owners will not have to invest in dinghies to reach their yachts moored in deeper waters, supplies of fuel and water for cleaning boats will be easier, and spillage of oil—now carried in jerry cans—will be history.

Malav Shroff, Ocean Blue
It’s the typical Indian mentality…first they buy Porsches, then they think of roads. Now people are buying boats, they will think of building marinas later.
Shroff senses a huge business opportunity in the anticipated shortage in docking facilities, and others agree. To them, Goa, Chennai and Kochi provide the maximum opportunity.

Hope Floats for Real Estate in India !

A United Arab Emirates- based project development company, Rakeen, and Chennai-based mining firm Trimex Group plan to jointly invest up to $5 billion (Rs19,850 crore) over five years in the Indian real estate market. They have partnered to form a 50:50 joint venture company known as Rakindo Developers Pvt. Ltd. Rakindo plans to build a first of its kind marina outside Chennai on the East Coast Road to Puducherry in Tamil Nadu.. The marina will have resorts and luxury apartments. The company will also be building infrastructure facilities in the marina. The marina will be like a mini port of 3.5km. The company is looking at more such marina projects in India. Read more...

Boating Dreams: How to Buy a Yacht and Cash-In on it?

Would you like to own a yacht?
Would you like to pay for it with charter income & tax savings?
Would you like to dramatically reduce your 2008 income tax bill?
If you answered “YES!” to all three questions, keep reading.

Whether you're going to sail the open water, fish your favorite coves or chart a course to your dream retirement, buying a yacht is the adventure of a lifetime. You can find many exceptional values in both new and used yachts. To make sure you get years of pleasure and adventure out of your boat, buy smart!

CHOOSE YOUR BOAT

Choosing a boat is a very personal decision. Ask yourself how you wish to use your boat. Obviously you wouldn't want to go and buy a racing sailboat if your intention is to cruise the bay with family. May be you want to hold corporate meetings onboard as well?

CHOOSING THE RIGHT GEAR

Many boats come stock with excellent gear and electronics, but undoubtedly you will want to add an item or two to your new boat. Professionals can help you choose what gear best suites your needs and budget, install it for you and teach you how to use it. Have fun planning and putting together your new boat.

DEALER"S SERVICES

• Does your dealer have a certified staff of sales professionals to install and service your new yacht.?
• Are they licensed, insured and bonded?
• Do they have mobile dockside service to help you no matter where your boat is?
• Do they have emergency technicians available 7 days a week?

FINANCE YOUR BOAT RIGHT

Anyone purchasing a boat or yacht should carefully look at tax issues in developing a financing strategy since some loans can be structured to include tax benefits. An experienced marine lender will be able to explain the general tax implications of various financing strategies. As always, you should review these options with your accountant or tax advisor.

• Should I finance my boat, even if I can afford to purchase it outright?
Investment earnings can far exceed the cost of marine financing. Financing your boat or yacht could cost less than outright purchase if you choose to allocate that money for prudent investment in stocks or bonds, and take advantage of tax benefits.

• Will a boat qualify for a second home deduction?
Yes, if a boat has a place to sleep, a head and a galley it will qualify as a second home deduction.

• What does this give me?
You can write off all your interest expenses related to the boat, just as you do your primary residence.

• What restrictions apply?
The IRS only entitles you to one 2nd home deduction, so if you already own a home, it might benefit you to finance your boat through the equity in one of your homes

• Can I write my boat off as a business expense?
Many do write off their boats through their business; however you would want to meet with your own accountant to insure you followed IRS guidelines.

PLACING YOUR NEW YACHT IN A CHARTER

Is your concern about the cost of owning and maintaining a yacht keeping you from pursuing that dream? Then placing the yacht in charter with a reputable charter company can help you achieve that dream, as it has for thousands of yacht owners.
Placing your yacht in charter enables you to:
• utilize your yacht.
• help pay for it with charter income.
• take advantage of tax deductions that will dramatically reduce the cost of owning your yacht.
• You also will enjoy professional care and maintenance for your yacht provided by the charter company.
• Chartering enables you to use your time for boating — while letting an experienced service staff attend to the hassles of maintenance.


In general, here’s how the tax laws apply to charter boats. Chartering converts your yacht from a personal to a business asset. As such, your purchase of a yacht qualifies for tax deductions applicable to business investments, including a significant tax deduction in the year of purchase and on-going deductibility of charter-related expenses, while generating revenue to help pay for ownership expenses. This revenue is earned while your yacht might otherwise remain tied to the dock.
Thus to conclude, with the fundamentals covered - you are now set to pursue your boating dreams! Read more...

Marinas! India Gears for a Different Kind of Parking Lot

JOINT VENTURE : Marina Project Planned The Thiruvananthapuram-based Floatels India Pvt Ltd and the Sydney-based J.S. Parsons Structural Consultants Pty Ltd will work together to set up marinas in India. The two companies plan to form a 50:50 joint venture that will design and build marinas, said Mr. M.R. Narayanan, Managing Director, Floatels India, and Mr. Joshua Parsons, Managing Director, J.S. Parsons Structural Consultants. While Floatels India has interests in hospitality and construction, J.S. Parsons has worked on marina projects across the world. The joint venture company will be registered in India and will fabricate the marinas in the country. Land for setting up the fabrication unit has been identified in Kochi, they added.
Initially, the company will look at working on marina projects in India, Mr. Narayanan said. Over the period, it also plans to fabricate marinas in India and export them to other parts of the world, Mr. Parsons added.

MODERN MARINAS According to Mr. Narayanan, there is a need for well-designed, modern marinas in India. There is tremendous potential for water-based leisure activities in India, especially given the country’s long coastline. And modern marinas can help boost such tourism-related activities. In Kerala, the Government has plans to build marinas in Kochi and Alappuzha, he added. Marinas create significant employment opportunities, with every berth in a marina generating employment for up to 10 people, Mr. Parsons said. They also create economic benefits for associated industries such as boat building, restaurants and so on.

Read more...

Fraction of a Boat? Consumers Invest in Assets, Transumers Invest in Experiences !

Wealthy people today do not only invest in assets- but in experiences. Experience is becoming more important than ownership. ‘Fractional ownership’ is a shared-ownership structure that allows people to buy only part of a costly item. Today there are many ways to have a fractional lifestyle. One such service, www.bagborroworsteal.com, sells the use of a revolving array of designer handbags and jewelry that can cost thousands to own but $20 to $175 a month to use. Buyavineyard.co.uk sells partial titles to some French vineyards; and several luxury hotel companies, including Ritz-Carlton and the Four Seasons, offer fractional ownership of some properties they own or manage around the world.

Transumers are consumers driven by experiences instead of the 'fixed'. They are those persons driven by entertainment, by discovery, by fighting boredom, who increasingly live a transient lifestyle, freeing themselves from the hassles of permanent ownership and possessions. The fixed is replaced by an obsession with the here and now, an ever-shorter satisfaction span, and a lust to collect as many experiences and stories as possible. The past is, well, over, and the future is uncertain, so all that remains is the present, living for the 'now'.
Why agonizingly wait for years (or even forever) to save up your hard earned cash to purchase the latest boat you've always promised yourself when you can have access, based around fractional ownership. Being part of a fractional boating club is growing in popularity not just because members can get on the water on some truly special boats , but membership gives you the lifestyle and exclusivity usually reserved for the privileged few.

Partnerships in luxury assets are not always smooth sailing. If you are already in a partnership that's been loosely managed, chances are its been a rocky road. Some of the problems heard of include:

• Diverging budgetary preferences
• Competition for planning & management control
• Simplistic and inflexible scheduling agreements
• Differences in willingness to do maintenance
• Poor asset care and use
• Lack of communication between owners
• Improperly managed expenditures

Thus to conclude, you are seeing it in recreational vehicles, soon you’ll also see it in helicopters. Just about every luxury asset you can think of can and will be fractionalized.

Read more...