Waterfront projects drive yacht demand

(SATISH KUMA)   

The Middle East is emerging as a major market for leisure craft and equipment – a trend confirmed by figures from the Dubai International Boat Show (DIBS).

The 16th annual show at Dubai International Marine Club, Mina Seyahi, has more than 400 boats and yachts on display and is the largest showcase for the sector in the region. There has been a 10 per cent increase in the number of companies participating, taking the number up to 810, while six countries are represented for the first time, making a total of 48.

The show is 20 per cent larger than last year, say the organisers at the Dubai World Trade Centre. The luxury supplies and services segment has grown by 38 per cent, while the equipment and supplies section has expanded by 34 per cent.

The show has also seen an increase in the number of launches from major companies such as Al Harbe Marine, AS Marine and Gulf Craft, Azimut, Cigarette, Fairline, Ferretti, Princess Yachts and Viking. Some of these unveilings were world and regional launches.

The show features the largest on-water display, with a total of 158 boats and yachts – an 11 per cent increase compared to 2007. Ten multi-million-dollar super-yachts take pride of place.

Yet, despite all this, luxury yacht-makers and distributors say the market is still immature. But they agree the sector has a lot of potential for growth and say the region is set to become one of the biggest markets for yachts, equipment and supplies.

Helen Wynd, project manager at Dubai World Trade Centre, told Emirate Business: “There are a lot of factors driving the market for yachts and super-yachts. The Gulf countries are witnessing an unprecedented growth on reclaimed island sites and waterside developments.

“For example, the UAE has the three Palm projects, World islands, Dubai Waterfront, Dubai and Umm Al Quwain marinas, Dubai Maritime City, Conference Palace Hotel and the Al Raha Beach development, to name a few. Similarly a huge number of waterfront developments are also coming up in Oman, Qatar, Kuwait and Saudi Arabia.

“So with more than 30,000 anticipated berth spaces and an additional 1,500km of coastline being created, these massive waterside developments in the UAE and the region are generating a huge demand for leisure boats, equipment and associated services.

“More than 25,000 visitors are expected to attend the show from around the region, including key buyers from Kuwait, Qatar and Saudi Arabia.”

Emirates Business yesterday reported boat ownership in Dubai is expected to rise by 15 per cent in the next 12 months. Dubai Maritime City CEO Amer Ali said though marine infrastructure was still being developed the maritime sector was growing by more than 10 per cent.

A recent report on the world’s 100 largest yachts by Boat International UK magazine found nearly a third were owned by Arab nationals, with the world’s top five based in the UAE, Oman, Saudi Arabia and Egypt.

Timothy Leese, regional director of Princess Yachts, said: “In some ways the yacht market in Dubai is still very immature with heavy competition from local manufacturers and the lack of suitable berths.

“However, the market for super-yachts is poised for rapid growth when more berths become available in Dubai. Other countries in the region will also start to develop, in particular Bahrain. I think that market will also grow significantly. Right now the United States remains the biggest market for yachts, followed by southern Europe. The number of clients from Russia is also growing.”

Celine Weber, marketing and public relations director of ART Marine, said: “This market is very good for business, especially for distributors of big super-yachts because the region has a lot of money and the people here want to buy the best and the largest product.

“Still the market is yet to mature as it is in the early stages, and the US and Europe remain the biggest markets for super-yachts. But this region has a lot of potential.

“I have seen the way things have changed over here. Earlier people used to buy smaller yachts but now the demand for bigger ones has gone up. As they become more and more aware they are becoming more and more demanding and want the best.”

Manufacturers and distributors say the predicted downturn in the global economy has not made any difference to the super-yacht market in the Middle East – in fact the buying power of clients has gone up.

Weber said: “This is a wealthy region and I don’t think any economic downturn will effect it as most investors here do not have their money in the US. Even if it happens it will just have minor repercussions.”

Leese said: “I don’t think the slowdown has affected customers’ buying power at all – in fact they are becoming more demanding and want bespoke interiors, lighting schemes and communication systems.”

Boat International says yachts owned by the wealthiest Arabs in the region range in size from 140m to 160m and include luxury features such as helicopter pads, swimming pools, gymnasiums, squash courts, fully equipped hospitals and mosques.

Weber said: “Customers used to buy yachts that were 17m long, then it went up to 25m and now they want yachts that are more than 30m long. They want a lot of bespoke interiors, Jacuzzis on the flybridge, more cabins, more powerful motors, sunbeds, places to park jet skis, and the likes. In fact, last year we sold a number of yachts that cost more than Dh57 million and this year we expect to do even more business.”

The growing demand for super-yachts in the Middle East region is demonstrated by the stiff competition seen among boat-makers and exhibitors.

Weber said: “Companies like ours that distribute branded stuff are not affected by the competition, but nonetheless it is there. I have seen how customers are being offered free accessories and discounts. The competition is out there and it is very tough.”

Leese said: “The competition is very tough particularly from locally built boats as the overheads are lower.”

However, both agree that despite all the competition the sector is extremely lucrative – and the Middle East is the market to be in right now.The boat show ends on Saturday.