Denison: 2021, Record-Breaker Turned Challenge [In The News]

Demand for new build yachts and the shipyard slots to build them has created a “spillover effect” driving activity away from traditional hotspots, but the industry must brace for a challenging fourth quarter as inventory becomes scarcer, Bob Denison, president, Denison Yachting told Superyacht Investor.

This article was featured on SuperyachtInvestor in September 2021 and was written by Yves Le Marquand.

The Florida-based broker has recently returned from a visit to yards around Turkey, he said he was “very surprised” at the amount of activity in the yards there. US clients have been utilising Turkish yards too, said Denison: “Right now there are three, about to be four, building new boats there, which is really good to see.”

Denison have also signed two projects out of Holland in the past six months. “I think as you see more projects happen in Holland, Germany, Italy, you’re seeing more boats being built in places like Turkey. This is no disrespect to Turkey, but they usually build on spec. Which is becoming more attractive as slots are getting pushed back to 2023, 2024, [20]25 [in traditionally popular areas].”

This is a positive for the market as a whole as areas which would not have seen growth like this are now doing so, said Denison. “What do they say? That a rising tide lifts all ships. I think you are seeing that in new construction where there’s spillover effect. When you can’t get a slot in Germany or Italy people are starting to explore other places like Turkey,”said Denison.

Demand for slots is also pushing buyers to look on the resale market, but that inventory is getting increasingly scarce, said Denison. “It all sounds good, but we are seeing some compression; because there is a lack of inventory it is going to be a very challenging fourth quarter for our industry.”

Denison has never experienced anything like this in the industry before. “Never, not even close,” he added. There is now also a shortage of materials leaving yards struggling to source certain materials and increasing prices. “Not just for superyachts, it’s also for tenders, outboard motors, resin — most of the guts of a ship, of any size, you’re having supply issues.”

This is partly due to the impact from other industries. For example, shipping companies are often global corporations, “I don’t care how cool a superyacht is when you have companies like Toyota vying for the same material, the shipping manufacturers are going to go with them.” Denison said most of the yards his firm has talked to expect some semblance of normalcy back in supply chains Spring 2022.