Due to the unique nature of the YachtPlus Programme, some people have been asking about the benefits of becoming an Owner. We have summarised the main questions below. Please feel free to contact us if you have any further queries and we'll be happy to answer them.
What is fractional ownership?
Fractional ownership is a powerful new business model, combining the quality and guaranteed availability of ownership at a fraction of the price. It is also a much better proposition to rental/charter where costs are often high and quality mixed.
Fractional ownership lowers the threshold for access to expensive and typically under-utilised assets such as jets and high-end real-estate (e.g. holiday villas). In the private aviation space, NetJets’ pioneer programme now offers access to the world’s largest private jet fleet.
The YachtPlus programme applies, for the first time, fractional ownership to luxury yachts: Instead of owning a boat and having the cost and maintenance headaches associated with full ownership. Whilst YachtPlus competes to some extent with traditional yacht ownership or charter, its “third way” yachting solution opens a whole new market for access to a yacht as a hassle-free lifestyle asset.
What exactly do I buy when I subscribe to the YachtPlus programme?
Through the YachtPlus Fractional Ownership Programme (“the Programme”), you acquire a fractional interest in a specific new-build luxury motor yacht in exchange for the right to access a fully serviced and crewed fleet of identical luxury yachts for a guaranteed number of weeks per year for the duration of the Programme.
What is the minimum Participation?
The minimum stake is 12.5% of the yacht (1/8th share). This corresponds to an occupancy entitlement of a guaranteed five weeks per year, which can be used on both sides of the Atlantic. Owners can purchase one or more 1/8th interests.
Why has nobody else done what YachtPlus does?
The founders of YachtPlus believe they have aligned the two key elements to offer a successful yacht fractional ownership, which no other company has so far been able to put in place:
1) Dedicated building capacity: YachtPlus has secured capacity in one of Italy’s most high-tech boat yards to meet construction demand in its Programme.
2) Financial engineering: fractional ownership as a “third way” ownership alternative demands complex financial structuring. YachtPlus’ cofounders have backgrounds in some of the world’s leading investment banks or have established track records as successful entrepreneurs.
How fast do you expect the fleet to grow?
YachtPlus launches with an identical fleet of 41 meters Foster & Partners designed contemporary motor yachts that is expected to reach a value of EUR 150 million by 2010 and consist of at least 10 yachts. At any stage where we feel there is demand for a different type of yacht, be it a motor yacht that is larger still or a fleet of sailing yachts, YachtPlus will add different yacht sizes and yacht types to its fleet and allow its Owners to interchange across the fleet.
What happens if I cannot use my designated weeks? Do I forfeit them?
You do not forfeit your unused weeks. As an Owner, you can offer unused weeks for charter through YachtPlus and receive the net charter revenue.
If I charter out my unused weeks, what do you expect the weekly charter rate to be?
Based on current market rates and charter broker quotes, a high-quality contemporary new motor yacht of 41 metres (132 feet) in length charters for EUR 80,000 per week in low season and up to EUR 100,000 per week in high season, excluding the customary 15% tip to the crew.
What are the chances of finding charter during off-peak weeks?
Although demand for charter peaks in summer in the Mediterranean and winter in the Caribbean, the off-peak weeks in the YachtPlus annual cruising calendar still allow for very fine cruising. YachtPlus International, the central agent for the charter of our Owner’s unused weeks, knows the occupancy patterns of each of its Owners and Owners’ friends, a fair share of whom prefer off-peak cruising, and they will be the first port of call when an Owner’s week becomes available for charter. In addition, through our Preferred Partners within the yacht charter broker community, we will actively promote the yachts. Finally,we also do programmes with corporate clients who are less season-bound.
How long is the contract term?
We think of YachtPlus as a solution to secure access to a yacht as a lifestyle asset and as such there is no limit to Owner’s participation. However, there is a limit to the age we allow our Programme yachts to reach: none of the yachts in our Programme will be older than eight years.
What happens at the end of the contract?
When the yacht reaches eight years of age, the Owners automatically mandate
YachtPlus to offer her for sale in the open market.
Does this mean I am locked-up for eight years?
For Owners, there is no obligation to stay in the Programme for the full eight years. If an Owner wants to leave early, his share in the yacht will be remarketed through YachtPlus and he will receive the proceeds of sale, minus a remarketing fee.
What do you expect liquidity to be before the end of the contract?
We expect subscription to each of the yachts we offer to be oversubscribed and foresee a waiting list within the year.
What can I expect the yacht to depreciate per year?
Market data supports the assumption that a high-quality uniquely designed custom-built yacht roughly keeps it value over the years.
How does YachtPlus structure ownership on the legal side?
We have structured Ownership in such way that our Owners are 100% protected against the two major credit risks in co-ownership schemes: default by another Owner or bankruptcy by YachtPlus itself.
Does this mean that my ownership is completely ring-fenced from any claims third-parties may have against YachtPlus as a company or one of the other Owners?
That is correct. At every stage, the yacht is out of range of creditors.
Are the yachts mortgaged?
The yacht cannot be used as security against lending, not by any Owner for the fraction he owns and neither by YachtPlus, which has no legal title to the yachts anyhow.
What if sufficient Owners cannot be found in any given yacht?
The yachts are financed by each of the Owners. Although unlikely, the inability to find sufficient Owners to syndicate construction of any given yacht would merely result in a delay in the order until the syndicate is complete.
How does payment work?
The sign-up process is very straightforward. Owners first put a modest deposit down to secure their place in the Owners’ syndicate of a specific yacht for a period of one month. If they sign up within that month, payment of the balance of the advance deposit is made. Once all Owners in any given yacht have done the same, the deposits become non-refundable, the order goes in and Owners can look forward to taking delivery of their yacht roughly 18 months later. From that point on, one annual payment covers both the acquisition and maintenance dues of the yacht for the length of the Programme.
Apart from alleviating the cash-flow impact of upfront acquisition, this financing mechanism is engineered in such way that it achieves a zero VAT rate on our Owners’ purchase of their share, saving them between 17.5% to 25% on the price of their share.
Does YachtPlus look after the yachts?
YachtPlus services and crews the yachts on behalf of its Owners. All maintenance and servicing costs are shared amongst the Owners pro rata their ownership participation in the yacht.
What is included in my annual dues?
The list of what is NOT included is shorter than the list of what is included. Fuel burn, mooring fees, telecoms, and food and drinks consumed by the Owner and his guests whilst cruising are not included.
The annual dues cover all other expenses related to the yacht, including:
- Fully crewing the fleet for 40 weeks of the year with a crew of up to eight.
- Cross-Atlantic repositioning between Mediterranean and Caribbean and back.
- Ongoing maintenance and servicing, spare parts, engine maintenance.
- Major repairs, dry-docking, and major refits if necessary.
- All other operational expenses related to the yacht.
- Even tips to the crew!
Are there any cost surprises?
Annual maintenance and management dues are calculated on a cost-plus basis, averaged over the fleet rather than attributed to one particular yacht. This helps Owners save money. As a result, we expect the annual dues to average around EUR 200,000 per year per 1/8th Owner. By setting the budget in advance, at the beginning of every year, we mitigate the cost unpredictability that is a feature of full yacht ownership.
In addition, as a result of how YachtPlus structures ownership and subject to applicable legislation, there is no VAT payable on annual maintenance and servicing charges. This benefit is passed entirely to our Owners.
In certain jurisdictions, Owners can also expect to benefit from fuel costs at commercial (bunker) rates rather than retail rates, which saves them over 50% per litre of fuel.
Do you “double-book” the yachts to make more money?
In contrast with other co-ownership schemes, especially in the real estate space, we do not “double book” the number of available weeks per year. As a result, we do not have to rely on the probability of no-shows and cancellations to be able to guarantee each Owner his/her available weeks. In addition, we put an absolute limit on the number of Owners per yacht of eight Owners only.
Do you guarantee my weeks?
Yes we do. Every year, the fleet is made available on both sides of the Atlantic for a total of 40 weeks. By having only eight Owners per yacht, we can guarantee each Owner five weeks’ access to the yacht per year per 12.5% participation he/she takes in the yacht.
Does this guarantee include use of the yacht during peak-time?
By further dividing the 40 available weeks in 16 peak-weeks and 24 off-peak weeks, we can also guarantee each 1/8th Owner 2 peak weeks and 3 off-peak weeks per year.
Is access limited to the yacht in which I took a Participation?
It is most definitively not. The strength of the fractional model is that it pools fractionally-owned assets for use by all owners. This means that, as yachts are added to the fleet, Owners’ access points multiply.
How do you deal with repositioning?
Cross-Atlantic repositioning twice a year, a formidable expense for a sole owner of a yacht, is shared amongst all Owners pro rate their ownership.
Repositioning within the Mediterranean or Caribbean is free for Owners who access and disembark at the yacht’s home base. These bases are balanced out over the Mediterranean and Caribbean and can move around over time, depending on how our Capacity Model identifies “clusters” of demand in specific zones of the respective cruising areas. Factors such as vicinity of airports and transport facilities are taken into account.
Access away from the yacht’s home base incurs a repositioning fuel charge and may take some time out of the Owner’s days’ use. However, the overriding principle is that an Owner will never have to pick up the tab for the previous or following user disembarking or accessing the yacht at any specific location.
Is there a specific check-in and check-out time?
Owners can check-in from 1pm onwards on Friday and YachtPlus requests them to check-out by 1 p.m. on Thursday. If Owners choose to disembark at any location different from the yacht’s home base, they will be given an estimate of the cruising time necessary to bring the yacht back to the shorter of the difference between either (1) their preferred drop-off point and the next Owner’s scheduled boarding point, or (2) their preferred drop-off point and the yacht’s home base. The Captain will then build in this time in their journey planning. The same applies to an Owner who embarks away from the home base.
Here again the overriding principle is that an Owner’s time should never be affected by the behaviour of the previous or following Owner.
Is the price of a 1/8th Participation 1/8th of the yacht’s offer price?
Yes, it is the mathematical fraction of that specific yacht’s offer price.
Do I pay VAT on top?
As a result of YachtPlus financial engineering, we achieved a 0% VAT rate on acquisition without in any way restricting the use of the yacht in European and Caribbean waters.
Where will the yachts be registered?
The fleet will be cruising under English flag.
Do you expect the fleet to diversify in type and size of boat?
YachtPlus brings a new philosophy of yachting to the seas, by introducing contemporary comfort to a luxury private yacht as a 21st century lifestyle asset. By developing its proprietary product range and sourcing construction of its fleet from the best European yards, YachtPlus retains full control of quality of design and build,
The YachtPlus launch fleet is designed by Foster & Partners, the renowned British architect studio lead by Norman Foster. Its 40 "Signature Series" yacht of 41 metres (132 feet) in length, with 5 cabins for up to 12 guests and a crew of 8, embodies this new philosophy. However, going forward, once we plan to add yachts of a different type and size.
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