Many people assume that constructing a yacht is somehow the ultimate objective and that every client would build if they could afford to. In my experience that is solely dependent on the client, whether they are willing to make compromises and how long they are prepared to wait before getting on the water. I’ve had many clients who could well afford to build their own custom yacht but have made the decision to buy an existing brokerage boat.

The obvious question therefore becomes: why build a yacht when you could simply buy an existing one?

Some people love creating things

It might surprise you that more than half the yachts I have built for clients have been their very first yacht, and four of those projects were over 80 metres in length – that’s a very considerable first yacht!

That is not to say those owners had no experience of yachting, but the thing that really drove them to do it was their passion to create and build new things.

These people have already built businesses, developed revolutionary products, founded companies and turned concepts into reality. It’s in their very DNA. By their very nature, they are creators.

For these people, building a yacht is often far more than a purchasing decision. It’s a once in a lifetime project where they have the resources to let their imagination run free.

In fact, I have seen many owners who appear to enjoy the process of building their yacht almost as much as they enjoy using it once delivered.

There is a reason why so many owners build multiple yachts during their lifetime.

One of the most famous examples is the American automotive entrepreneur Jim Moran who built eight yachts bearing the name GALLANT LADY. While that may be an extreme example, there are countless owners who have built two, three or even more yachts over the course of their lives.

The process itself becomes part of the enjoyment.

The freedom to create something unique

One of the greatest attractions of a new build project is freedom of expression and design.

Of course there are safety and flag state regulations, classification requirements and stability criteria that must be respected, but unlike residential construction, there are no planning restrictions.

The only real limit is one’s imagination.

This freedom has produced some of the most remarkable yachts ever launched, from Philippe Starck’s revolutionary Sailing Yacht A, the recently delivered 114m NAUSICAÄ by Marc Newson or indeed the groundbreaking 75m yacht KENSHO, in which I was lucky to be involved. These boats broke convention and deservedly won all the main yachting awards. 

For many owners, creating something entirely unique is deeply rewarding. The yacht becomes more than a means of travelling the world. It becomes a reflection of their personality, creativity and vision.

One could argue that some of the world’s largest yachts have become true design statements and pieces of art in their own right.

Every yacht will one day be for sale

While constructing a yacht can fulfil all your specific requirements and be a highly enjoyable experience, one risk is that if you get it wrong, the depreciation can be very painful indeed.

One topic I discuss far more openly than many people in our industry is depreciation. Perhaps because it is an unfortunate truth but if you build the wrong yacht or pay the wrong price for a yacht, depreciation will outweigh any other operational cost you incur by many multiples.

I always say to clients, “Every yacht will one day be for sale.” That relates to whatever boat you end up owning.

That does not mean owners should avoid personalising their yacht. Quite the opposite.

However, there is a difference between creating a yacht that reflects your personality and exact requirements and creating one that only appeals to you.

A few seemingly small design decisions can have a surprisingly large impact on future value.

This is where experienced advice becomes invaluable. They understand the secondary market very well indeed. They know which boats, specification and design details make boats either attractive to a wide pool of clients and ones which often languish for years for sale before only finally selling at a massive discount.

This is why experienced advice during the design development and specification phase is so valuable. The right boat, from the right shipyard, with the right design and specification will hold value very well. Thinking that just selecting a well-known shipyard will offer you protection from depreciation is far from true. They are not there to advise you on future resale value. They are there only to build you what you ask them to.

I can’t stress this enough. Every yacht will one day be for sale. Remember that saying alone and you will save yourself millions down the road.

Why brokerage can be so attractive

One of the strongest arguments in favour of brokerage yachts is simple: Time.

If you sign a contract for a large custom yacht at one of the leading Northern European shipyards today, delivery may be four or even five years away. That is a significant period of time.

Try remembering a holiday you took five years ago. For many people it feels like yesterday. For others it feels like a lifetime ago.

Many of our clients spend twenty or thirty years building successful businesses before deciding to buy a yacht. At that stage of life, five years can be a meaningful proportion of the years during which they are healthy enough and have sufficient time available to fully enjoy cruising.

A brokerage yacht allows immediate enjoyment.

You can inspect it, survey it, negotiate a purchase and start using it far sooner than you could ever build one.

Not all parts of the market are the same

One mistake I see people make is discussing new build versus brokerage as though every sector of the yacht market behaves in the same way. It doesn’t.

The answer often depends on the size and type of yacht you are considering.

In the 25 to 40 metre production yacht market there are often many comparable yachts available for sale at any one time. Models from major manufacturers share similar layouts, specifications and platforms.

Supply is generally higher and competition between sellers can be significant. From a pure value perspective, brokerage can be extremely compelling in this segment. 

One of the reasons brokerage can be so compelling in this size range is that there are simply so many boats available. A successful production model may have dozens of sisterships delivered, with multiple examples available for sale at any one time.

The reality is that while one boat may have a slightly better specification than another, the differences are often relatively modest. Buyers are therefore able to compare similar yachts side-by-side and negotiate from a position of strength.

In these circumstances it is often possible to buy a yacht for a substantial discount to replacement cost while sacrificing very little in terms of design, capability or enjoyment.

However, as yachts become larger and more customised, the equation changes.

The larger the yacht, the more that new build makes sense

At 65 metres and larger, the reality is that there are relatively few such yachts in existence and only a small percentage are available for sale at any given time.

The buyers of these yachts also tend to have highly specific requirements.

I have worked with clients who wanted minimum deckhead heights of 2.8 metres. Others wanted huge swimming pools. Some wanted vast beach clubs, spas, beauty facilities, gyms, paddle tennis courts or certified helicopter operations.

Many wanted all of the above!

These clients also had very strong opinions about exterior styling and interior design.

Trying to find an existing yacht actively for sale that satisfies all of those requirements can be like searching for a needle in a haystack.

These owners do not want to compromise. More importantly, they do not have to.

The reality is that a client may be able to buy an existing yacht for EUR 100 million. However, if their net worth is EUR 10 billion, they may prefer to spend EUR 200 million and build exactly what they want.

That is not because they enjoy overpaying for things. Most successful entrepreneurs are highly disciplined when it comes to money and that is how they got to where they are in life.

However, they have reached a point where they can afford not to compromise.

Read more about how to build a successful custom superyacht here

Brokerage can present extraordinary opportunities

One advantage of brokerage that should not be overlooked is market timing. When markets weaken, opportunities emerge. Owners sometimes have to sell. Priorities change. Economic conditions change.

Where there is pain, there is often opportunity.

In difficult markets it is sometimes possible to acquire exceptional brokerage yachts at very attractive prices.

Conversely, while shipyard pricing fluctuates over time, a shipyard is never knowingly going to sign a contract that they know will lose them money. As such, you are unlikely to absolutely “steal” a new build yacht.

Buying something you can already touch and feel

Another advantage of brokerage yachts is that they already exist. You can walk through them. You can sit in the saloon or at a bar to take in the space. You can experience the flow of different areas of the yacht. You can simply understand how they feel.

Some clients find this reassuring.

Even with the most sophisticated renderings, virtual reality walkthroughs and 3D modelling, they struggle to become fully comfortable spending hundreds of millions of Euros on something they can’t fully envisage only as a design.

Buying an existing yacht removes much of that uncertainty.

Building a yacht requires commitment of your time

There is another consideration that is often overlooked. Building a yacht requires time.

Even a relatively straightforward production yacht involves a surprising number of decisions. A fully custom yacht involves hundreds, if not thousands. The best projects are collaborative.

Owners who make time to engage with the process almost always achieve the best results.

I did once have a client on a large custom project who effectively said: “Build it for me.”

Apart from a handful of material selections, they entrusted our team to make most decisions on their behalf. The yacht was delivered and they were delighted. However, that level of trust is exceptionally rare.

Most owners want and should be involved to get the best possible outcome for themselves. They can lean on the advice and experience of the team but be there to make the final decisions. 

This process, properly managed, is part of the experience and ultimately the enjoyment of building your own yacht.

So which is right for you?

If you enjoy the creative process, want something entirely unique and are prepared to invest the time required, building a yacht can be one of the most rewarding projects imaginable.

If your priority is getting on the water quickly, reducing risk and benefiting from somebody else having possibly absorbed some initial depreciation, a brokerage yacht may be the better answer.

As with most things in yachting, the right answer starts with understanding the client and their expectations.