Building a custom superyacht is one of the most exciting projects an individual can undertake. It is also one of the most complex.

At best, building a yacht is a rare opportunity to create something entirely personal and unique. A yacht designed around your lifestyle, your cruising plans and exactly how you want to enjoy your time on the water.

At worst, a project can become over budget, late, frustrating and ultimately fail to deliver the yacht the owner thought they were going to receive.

The difference is never luck.

In my experience, more than half the success of a new-build project is determined by the work undertaken before a shipbuilding contract is even signed.

Many prospective owners assume the most important decision is selecting the shipyard. Others believe it is choosing the designer. Both are of course important.

However, the reality is that the success of a custom yacht is usually determined much earlier by the quality of the team assembled around the owner, the design development, the tender process and the contractual framework agreed before construction begins.

Once a shipbuilding contract is signed, the balance of power between the client and the shipyard shifts markedly.

That is why the work undertaken before the contract matters so much and should never be rushed.

Not all brokers are new-build advisers

A good broker with genuine new-build experience can add enormous value to a custom yacht project.

I stress the words “genuine new-build experience”, because buying and selling brokerage yachts and advising on the construction of a large custom yacht are two totally different disciplines.

Not all brokers are equal in this regard.

Being completely honest, was I capable of doing a 10/10 job as broker and owner’s representative on my first new-build project 20 years ago?

I certainly tried my best and cared deeply about delivering the best possible result for the client and worked incredibly hard throughout the process. But yacht construction is a very steep learning curve.

After multiple and significant new-construction projects since (some of them winners of the major yacht awards), I know things today that I simply would not have known on my first project.

Every build teaches you something. A clause you wish had been included in the contract. A detail that was not quite clear enough in the specification. A shipyard interpretation of a drawing that technically complied with the contract, but was not quite what the owner expected. A particular area of construction that needed closer client-side supervision.

These lessons aren’t found in textbooks. They are learned through experience, and often, unfortunately, the hard way.

This is why owners should focus on the individual advising them, rather than simply the company they work for. Experience in yacht construction truly compounds over time.

Make sure you question the experience of the individual who will be advising you. You don’t just want to be sponsoring their education! 

Read more about choosing the right broker here

The broker as the conductor

Many clients first focus on selecting a shipyard.

In reality, the most successful projects begin with creating the right brief and assembling the right team before a shipyard is ever approached.

I often think of the new-build adviser as the conductor of an orchestra. The owner is not simply hiring a broker. They are relying on someone to help assemble and coordinate a team of specialists.

That team may include exterior designers, interior designers, naval architects, specialist construction lawyers, technical consultants, paint surveyors, owner’s representatives, quality control specialists and eventually a build captain and chief engineer, to name just a few people you require to make a project properly successful.

A good broker should also know which designers and naval architects are best suited to a particular client and not have a preferred design house. Reflecting on that point as I write this, I note that every yacht construction that I have been involved in has had different designers. Every project is a blank sheet of paper and you are marrying the client, their expectations and taste to the right designer and team as a whole, not just replicating the same team every time. The yacht is custom and so too should be the team assembled to create it.

A lot of that comes down to chemistry. Developing a new design is a very personal process, so understanding the different designers and how they might gel with a client is incredibly important.

The objective should not just be to hire the most famous names. The objective is to assemble the right team for that particular owner and that unique project.

An experienced broker knows all the key people for each role, who to call to do each job and more importantly, when they call them they will know it’s a serious lead and be ready to work for that client. 

The most important work happens before construction begins

Owners are often surprised by how much work happens before steel is even cut.

On a very large 100m+ project we recently contracted, the process of design development, tender package preparation, tender process and analysis, shipyard selection and final contract negotiations took approximately twenty months.

We moved the process efficiently and with a clear objective throughout, yet it still took almost two years before construction commenced.

Smaller and less complex projects can move much faster, but it gives an indication of the level of detail and planning involved in creating a truly custom yacht.

Owners who rush into a shipbuilding contract often end up paying dearly for that decision later.

Why going direct to one shipyard can be risky

Many clients begin the process with a particular shipyard already in mind. That is completely understandable. The leading shipyards all have impressive track records and strong brand recognition.

However, I would rarely advise an owner to approach only one shipyard for a major custom project.

The reason is simple. How do you know whether the price they quote represents good value when you have nothing to compare it with? How do you know whether another yard couldn’t have offered a better delivery schedule? How do you know whether another shipyard is better suited to the particular yacht you are trying to build?

Additionally, if you approach only one shipyard, they then develop the design, have control and ownership of the intellectual property, so when they quote you a price that you might think is too high, you have only two choices, accept it or bin the whole design that you have taken months and months to work on with them. You can’t now take that design to another shipyard to quote upon. You have no leverage whatsoever.

On every large custom project over 70 metres that I have been involved with, the client initially had a preferred shipyard in mind. In every case, once we completed the design development, created a full, detailed tender package and invited multiple suitable shipyards to quote for the project, we ultimately selected a different yard.

That does not mean the client’s original choice was wrong.

It simply means that once pricing, delivery dates, technical proposals and contractual terms were properly compared, another shipyard represented the stronger overall proposition at that particular time.

Without comparison, it is almost impossible to determine the value of a shipyard’s quote with complete confidence.

Don’t let the shipyard design your yacht

There is another important reason why I rarely advise developing a custom yacht exclusively with a single shipyard from the outset.

A shipyard’s objective is to build an exceptional yacht, but also to build it as efficiently, predictably and profitably as possible. Those objectives are entirely understandable. They are running a business.

As a result, there is often a natural tendency to favour engineering solutions, technical layouts and construction methods that the yard has successfully delivered before. Proven machinery packages, familiar engine room arrangements, large (possibly oversized!) technical spaces and standard technical platforms reduce complexity, reduce risk and generally improve a shipyard’s margins.

However, those priorities do not always align with a client’s objective of creating something genuinely original.

On two recent custom projects over 75 metres that I have taken to contract, more than half of the shipyards invited to tender proposed simplifying elements of the design. In most cases, they recommended reducing complexity so they could utilise engineering platforms and technical solutions with which they were already familiar. They wanted much larger technical spaces than were necessary.

From the shipyard’s perspective, those suggestions were perfectly logical.

From the client’s perspective, however, they would have compromised many of the very features that made the yacht distinctive in the first place.

Some of these proposals came from shipyards widely regarded as among the finest in the world. This is not a criticism of those yards. It simply illustrates that every shipyard has its own preferred way of building yachts. The role of the owner’s team is to ensure the yacht remains owner-led rather than shipyard-led.

That is precisely why a client should first develop a technically viable design, fully validated by the design team, naval architects and regulatory specialists, before inviting multiple shipyards to compete for the project.

The question should never be, “How can we redesign the yacht to suit the shipyard?”

The question should be, “Which shipyard is best equipped to build the yacht we have envisaged and designed?”

If you are investing hundreds of millions of Euros in creating a truly custom yacht, the objective should be to find the shipyard capable of delivering your vision, not one that quietly steers the vision towards what is easiest or most economical for them to build.

A properly managed tender process creates that discipline. Competition encourages innovation, challenges assumptions and ultimately helps identify the yard that is genuinely committed to making the owner’s vision a reality, rather than simply adapting it to fit their preferred way of working.

Shipyards build yachts. They do not operate them.

This is one of the most important lessons in yacht construction. 

A yacht can be beautifully engineered but be challenging to operate.

I have seen projects where clients went direct to a shipyard without any representation and left it to the shipyard to develop and define the design, engineering and operational facilities of the yacht.

In these circumstances, we often find:

• insufficient crew accommodation
• inefficient crew circulation, resulting in poor service
• storage (cold, freezer, garbage, linen, toys etc…) being insufficient
• maintenance access being poorly considered
• tender access and guest boarding being uncomfortable and even sometimes simply dangerous

These are just a few examples of many. In isolation one or two might be just about acceptable, but as they rack up you end up with a yacht that simply can’t be operated by the crew to give you the service and enjoyment you reasonably expect. 

They will also directly affect the yacht’s future resale value.

Getting these things right often incurs zero cost, but it is why operational expertise must be represented within the project team.

At the appropriate point in the process, a build captain and chief engineer should be introduced.

Their practical experience can identify issues that designers and shipyards may not see.

Knowing when and how to bring those people into the process is another lesson that comes with experience.

Understanding shipyard pricing

The fact of the matter is that there are now a handful of shipyards capable of building truly exceptional custom yachts and the disparity in quality between the very best yards is much smaller than it was twenty years ago.

Most of the major custom yacht shipyards draw from similar pools of specialist subcontractors, suppliers and equipment manufacturers, but pricing can still vary dramatically.

Shipyard pricing is heavily influenced by their current order books, local labour costs and their specific supply chain.

A shipyard with a full order book stretching many years into the future has little incentive to price aggressively and will have to factor in a lot of future inflation into their price to protect themselves.

Another yard may be very actively seeking to secure a project. A good broker will know which shipyards are hungry from business and use this knowledge in advising you.

The availability of specialist subcontractors can also have a significant impact. A yacht is not built solely by the shipyard itself. Hundreds of specialist companies contribute to the finished product, and bottlenecks in the supply chain can materially affect both price and timing.

Labour is another major factor. Superyacht construction is incredibly labour intensive.

On a large custom yacht, labour typically represents well over half of the overall construction cost, either directly at the shipyard or throughout the wider supply chain.

One example is fairing and painting. The raw materials themselves represent only a tiny fraction of the overall contract value. Yet the labour involved in preparing and finishing a large yacht can account for close to 10% of the total build cost.

Changes in labour taxes, union-lead minimum wage rates, general wage inflation, labour shortages and subcontractor availability can therefore have a much greater impact on pricing than many clients realise.

This is another reason why a properly managed tender process is so important. It’s about seeking the best opportunity at that time. The picture is constantly changing. I once signed a contract at a shipyard for an 80m+ yacht which was incredible value. I had them quote on another project 18 months later and they were the most expensive shipyard of the five that quoted. The market is never static in that sense.

The specification is everything

Custom yacht specifications can run to hundreds of pages. On complex projects they can exceed over 1,000 pages with additional drawings as appendices. 

To a first-time client particularly, these documents appear incredibly detailed. When one initially flicks through pages upon pages of specification documents that list every nut and bolt, the specification of the stainless steel, the dust inclusion limits in the paint and all manner of details that a layman would find hard to digest, it would be very easy to conclude that nothing is missing.

But that is precisely where experience matters. A specification can be lengthy but still be missing a lot. 

It can appear detailed but still leave room for interpretation.

It can list every major system on board and still fail to define standards that differentiate an average yacht from an exceptional one.

If something is not clearly specified, the shipyard is not contractually obliged to provide it.

And if the owner later on decides they want it, that can become a costly change order.

The dark blue hull story

One true story perfectly illustrates this point. A successful businessman went directly to a shipyard to build a yacht without any professional representation. He felt he didn’t need advice as he had owned a yacht before and he was confident in his own negotiation skills. 

The specification provided by the shipyard looked very comprehensive. The process moved quickly and the client signed the contract without delay in order to meet a particular delivery date. 

A few weeks later, during the first project progress meeting at the shipyard, the client looked at a profile drawing and asked a simple question.

“Could you show me what the yacht would look like with a dark blue hull?”

The room went very quiet. The contract only allowed for a white, cream or light grey hull.

To most people, changing the colour of the hull sounds like a relatively simple decision. In reality, it is not. A darker hull can require additional engineering considerations, different insulation requirements, additional air-conditioning capacity and considerably more fairing and paint work. Darker colours reveal imperfections far more clearly, meaning the fairing and paint process becomes much more demanding often requiring several reshoots until the necessary finish is achieved.

The resulting change order was approximately EUR 2.5 million.

That single issue alone would have well exceeded the fee of experienced advisers and in a specification there are hundreds of these types of things which on a very large yacht will total tens of millions of Euros. Pre-contract, a good adviser would have negotiated the dark blue hull at zero, or negligible cost as pre-contract, the client holds the cards. 

It was an expensive lesson in why getting the specification right before signing really matters.

Building future resale value into the yacht

One subject I discuss more openly than many people in our industry is depreciation.

Perhaps because it is uncomfortable, most people simply avoid the topic, but the reality is that if you build the wrong yacht, get the specification wrong or the quality of the finished product is sub-standard, the cost of depreciation may ultimately dwarf your annual operating expenses by many multiples.

Every yacht will one day be for sale. I repeat this over and over to clients as this one saying alone will save them millions in the future.

It is the reality that should influence every major decision made during the design development and specification choices of a new-build.

The shipyard matters.

The layout matters.

The number of guest cabins matters.

Storage matters.

Crew areas matter.

Beach clubs, gyms and spas matter.

Interior design matters.

Tender and toy storage matter.

A highly unusual layout or a very personal interior may be wonderful for one owner but significantly reduce its appeal when it one day comes for sale. The best yachts tend to balance individuality with broad market appeal.

The objective is not to build a bland yacht. The objective is to build something distinctive that still appeals to future buyers.

Why brokerage experience matters when building a yacht

An experienced broker’s understanding of the secondary brokerage market and values is so valuable when advising on a custom build.

They spend their time visiting shipyards, designers and boat shows. They inspect yachts on a weekly basis. Every year they see hundreds of yachts and over the course of a career, thousands of vessels of all sizes.

They see the good, the bad and the ugly.

Most importantly, they develop an understanding of the features, layouts and design decisions that result in yachts holding their value exceptionally well and that sell quickly, and those that result in yachts depreciating heavily and languishing on the market for years unsold.

As such, while new-build advisory is a specialist area, long-term brokerage experience is so valuable when advising on a custom build.

A designer’s job is to create something beautiful. A shipyard’s job is to build it. A broker spends their life observing how the market ultimately judges those decisions later down the road.

The biggest cost of yachting, if you get it wrong, is not crew, maintenance, fuel or insurance. It is depreciation.

If you build the right design, at the right shipyard, with the right specification and the right level of build supervision, it is entirely possible to create something truly remarkable that also has outstanding resale value.

I have personally been involved in projects where a yacht subsequently sold for more than her original build cost.

I certainly would not guarantee that outcome, but it demonstrates what is possible when all the ingredients come together correctly.

What I can say with confidence is that owners who rush into a construction project without expert advice are far more likely to overpay, have a specification that is not sufficiently developed and ultimately build a yacht that provides less enjoyment than it should and suffers greater depreciation when the time comes time to sell.

When compared to the potential cost of change orders, poor decisions and depreciation, expert advice is a rounding error. Do not scrimp, do not bypass it and never feel rushed into signing a new build contract. 

Each Shipyard Requires Different Supervision

One thing that becomes apparent only after multiple projects is that every shipyard requires a different approach from the client side.

Some shipyards have exceptionally strong technical teams and highly disciplined internal processes. Others benefit from more intensive supervision in specific areas.

Some interpret specifications very literally and issue change orders really very readily! Others take a more collaborative and flexible approach.

Some yards need a large and highly present owner’s team where every plan needs “owner approval”. Others work better with a lighter but very experienced layer of oversight.

As a result, every project requires a different owner’s team.

Building the right team is not simply about finding good people. It is about finding the right people for that particular shipyard and that particular project.

That is a skill developed through experience.

Learning from 50 yachts: The KENSHŌ story

The success of a project is also heavily influenced by the owner having a clear vision of what they want.

This is another area where an experienced adviser can challenge assumptions and introduce ideas that a client may never have considered.

When we built the 75m KENSHŌ, which later won Overall Winner at the World Superyacht Awards, the owner and I spent months visiting and inspecting over 50 yachts together for inspiration.

We carried a laser measurer with us everywhere. The stewardesses showing us around yachts thought we were very unusual, but we were on a mission!

We were studying all the things that make a yacht feel special:

• Deckhead heights
• Corridor widths
• Stair gradients
• Side decks
• Sight lines
• Room proportions
• Guest flow
• Unique features

Some of the layout inspiration actually came from a 45 metre yacht that I introduced to the owner. Other ideas came from much larger vessels.

The objective was not to copy any one yacht. It was to understand why certain spaces worked so well and then combine the best ideas into something entirely new.

That process ultimately helped create a yacht that was unique, highly practical and recognised as one of the most important yacht designs of its generation.

An experienced adviser who has seen hundreds, if not thousands of yachts over the years can bring a lot of valuable and fresh ideas to the table.

So how should you build a Superyacht?

Start by understanding what you want to achieve.

Assemble the right team.

Develop the design properly.

Create a detailed specification.

Draft a proper, full, unambiguous tender package.

Run a proper tender process.

Have multiple shipyards quote.

Have your adviser analyse and interpret the different quotes to uncover the best value.

Review and negotiate the contract specifications and drawings very diligently.

Negotiate the contract carefully.

Think about operation.

Think about resale.

Bring in technical and operational expertise at the right time.

Above all, NEVER rush the pre-contract stage.

Done properly, building a yacht can be one of the most rewarding projects of an owner’s life.

Done badly, it can become an expensive headache that arrives late, costs too much and never quite delivers the yacht the client was hoping for.

As with most things in yachting, a successful outcome is defined by what happens at the very beginning of the process.