Jeff Bezos' new superyacht heralds roaring market for big boats

EVEN in the ostentatious world of superyachts, project Y721 stands out.

When completed, it will be 127m long, span several decks and sport three enormous masts, according to the scant information available on the website of its manufacturer and various online bulletin boards of yachting enthusiasts. That will make it one of the largest sailing yachts ever built in the Netherlands, the unofficial capital of boat building for the extremely rich.

Or in this case, for the richest of the rich: Jeff Bezos, Amazon.com's founder and the wealthiest person on the planet, owns the boat that is set to move to a new shipyard for completion next month, said people familiar with the billionaire's pet project.

Mr Bezos' superyacht, which likely will cost upwards of US$500 million to build and have its own support yacht with a helipad, is the latest accessory - along with The Washington Post, the movies, the tabloid scandal - heralding the Amazon mogul's transformation from geeky technologist to globe-trotting megabillionaire. It is an indication of the enormity of a fortune that has accrued even faster as the world has been upended by a devastating pandemic.

It is also a testament to a fiercely secretive industry that by all accounts has thrived as a direct result of Covid-19, and a stark embodiment of the widening chasm between the fortunes of the super-rich and almost everyone else over the past 14 months.

Steven Spielberg has a new yacht on order, as well, said three people familiar with the director's plans, who were not authorised to speak publicly about it. His current yacht was recently listed for sale for 131 million euros (S$211 million).

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"The market's been roaring," said Sam Tucker, head of superyacht research at London-based VesselsValue. The number of transactions in recent quarters was record-breaking - the second-hand market is absolutely red hot.

If anything, demand for extravagantly high-end yachts has outstripped supply.

"It's impossible to get a slot in a new-build yard," he said. "They're totally booked."

The inland waterways of northern Germany, home to several highly regarded shipbuilders, are crammed with the city block-size steel hulls of future superyachts, as well as existing yachts back for a spruce-up. In total, there are about 50 boats longer than 100m currently under construction, Mr Tucker said. Bremen-based Luerssen is responsible for 10 of them.

Covid-19 was not a factor when Mr Bezos put in his order a couple years ago, but it has contributed to the industry's boom. With galas cancelled and land borders closed, yachting suddenly seemed the best option for private, socially distanced leisure and a good way to escape from the prying eyes of the public that might look askance at wealthy overindulgence during difficult times.

The pandemic put new value on so-called explorer yachts, some of which can cruise for 9,000 nautical miles (16,700 km) without needing to refuel, said Aino Grapin, chief executive officer of superyacht-interiors studio Winch Design.

"Clients can enjoy life at sea for long periods of time without having to go mix with others," she said.

As in any industry, yachtbuilders had reasons to be concerned last year when initial lockdowns froze new orders and markets plunged. But, by summer, the ultra-wealthy realised they had not actually lost money.

By many measures, 2020 was a record year. As business closures rendered millions unemployed and global gross domestic product slumped, the world's richest people added US$1.8 trillion to their collective fortune, the Bloomberg Billionaires Index showed.

And the orders started flowing.

"The type of wealth has changed but not the wealth itself," said Giovanna Vitelli, vice-president of Azimut Benetti Group, which has almost three dozen superyachts in its order book.

"This is the difference with 2008 when the crisis was really widespread."

The influx has upended industry conventions. In normal times, it took years for rich clients to muster the nerve to splurge on a huge boat. They would typically start by chartering, then buy something comparatively modest - say, a 100-footer. Now they are going right for the big stuff, brokers said.

Part of that is the lifestyle swap. Where before they would rent out a villa for their dozens of friends and family members, now they are hosting them on the ship. People are also buying yachts before ever stepping foot onboard, something unheard of just a year ago.

The enthusiasm among yachting neophytes for boat ownership is another indicator of the surging fortunes of the wealthy as the world tacks towards a K-shaped recovery from the pandemic. Beyond the initial purchase price, owning a superyacht is expensive, with operating costs averaging about 10 per cent of a boat's value, or US$60 million a year and up at the top end.

That would not bother Mr Bezos, whose fortune hovers around US$200 billion, according to the Bloomberg ranking. In 2019, he got a taste for the yachting life, vacationing on Eos, the sailing yacht of friend Barry Diller and his wife, fashion designer Diane Von Furstenberg.

That same year, rumours circulated online that he had purchased a 130m motor yacht called The Flying Fox. But those reports were erroneous; Mr Bezos' sailing yacht will be similar to Mr Diller's.

One thing it would not have, because of its enormous sails, is a helipad. So Mr Bezos and his partner, Lauren Sanchez, a helicopter pilot, have commissioned a support yacht, people familiar with their plans said.

Amazon's CEO, however, may want to heed the lesson learned by fellow billionaire David Geffen on superyacht humility. The DreamWorks Animation co-founder sparked global outrage last March after posting images on Instagram of his sunset view from his superyacht, Rising Sun.

"Isolated in the Grenadines avoiding the virus," he wrote. "I'm hoping everybody is staying safe." BLOOMBERG