Italian luxury yacht-maker Ferretti Group has partnered with ACI Real Estate to build a shoreline property in Dubai. Its CEO, Vincenzo Cannatelli, tells Seban Scaria that the region's numerous waterfront developments are good catchment areas for the company.
Vincenzo Cannatelli maintains a fascination for beautiful marinas and the luxury waterfront developments of the world. In his line of business, one has to have a craft for identifying the best yachting destinations and an eye for people who love luxury. Cannatelli was fast to notice the massive luxury apartments sprouting in Dubai's waterfronts and its thriving marina industry.
Being the CEO of Ferretti Group, the manufacturers of luxury motor yachts and sporting yachts, Cannatelli is now looking at partnering with real estate firms for selling luxury yachts in the region. "The growth of waterfront properties in Dubai will augur well for our business," says Cannatelli. The boom in the region's waterfront property markets has resulted in an explosion in the number of berths. Estimates suggest that Dubai will be home to more than 20,000 berths in the next five years.
Realising the potential for luxury yachts in the Dubai waters, Ferretti Group has partnered with ACI Real Estate to build a shoreline property in Dubai. Recently, both companies announced the launch of two luxury waterfront residences, Ferretti Luxury Beach residence and Pershing Luxury Beach Residence. The freehold ownership project, branded as Marine Legends, is valued at about Dhs6 billion ($1.6 billion) and is located at Nakheel's Dubai Waterfront.
Canatelli says that Ferrretti's interest in Dubai is strictly to sell luxury yachts. "We are not getting involved in the real estate business, but choosing the right partners to scale up our business. Customers of ACI Real Estate are our potential customers too and they would be interested in owning one of our yachts."
The yacht-maker, which is 60 per cent owned by private equity firm Candover Investments, currently manufactures around 600 yachts annually and sells close to 30 in the UAE. It has plans to sell around 60 units every year in the UAE in next five years and will be bringing two of its brands - Ferretti and Pershing - into the Marine Legends.
With ACI planning to offer yachts to its premium customers on a charter basis, Ferretti plans to sell 24 medium-sized yachts to ACI. The deal, according to Canatelli is a new marketing experience for Ferretti, which has tied up with a realty firm for the first time.
"The best thing is that ACI property buyers can actually have Ferretti yachts at their disposal, without owning them," says Cannatelli about the deal. "Ferretti Yachts and Pershing Yachts designers have proposed to design common areas of the towers, lending them their signature touch of elegance and sophistication. The boats will be custom-built for the project."
Yachting interest
Cannatelli credits the increasing number of high net worth individuals for the surging demand of yachts in the region. "Yachting is certainly catching up in the UAE. Customers in the region prefer 50 feet to 60 feet medium-sized yachts with more style, power and innovation and are willing to spend €5 million to €15 million on a luxury boat," says Cannatelli.
However, he clarifies that the Middle East has never been strange waters for luxury yachts. "They used to be sold in the region from some time ago, but they were all parked in the Mediterranean. With the development of various marinas in Dubai and Abu Dhabi, people are interested to buy yachts and the culture of boating will certainly increase."
Ferretti, established in 1968 by Alessandro and Noberto Ferretti, pursues growth through acquiring companies. It has purchased eight companies in 12 years. Ferretti's nine luxury motor yacht marques include Ferretti Yachts, Pershing, Itama, Bertram, Riva, Apreamare, Mochi Craft, CRN and Custom Line.
"We have segmented the brands so that they respond to different characteristics. Pershing, for instance, is a performing boat with high speed and technology. We already have nine of the most prestigious brands in the world and recently finalised an acquisition of a light marine in the US and we are looking out for more," says Cannatelli.
Ferretti recently acquired US yacht distribution and service provider Allied Richard Bertram Marine Group. The acquisition is expected to provide Ferretti with a distribution platform to service customers in the US.
Clear waters
With the gloom spreading over western economies, the luxury yacht industry was expected to feel the pinch. But again, it appears that there is an offsetting effect from developing economies. "Ferretti caters to the high end of the market, so we are not much affected by the global downturn. But certainly our sales in some markets are weaker than before," says Cannatelli pointing at the US. "But other markets are performing well."
"We have seen some weakness in the US, especially in segments below 40 or 50 feet," he says, adding that the demand for yachts are quite positive beyond 60 to 70 feet and Ferretti has seen significant sales in the Middle East, Asia, Russia and Latin America.
He confirms that the company has seen a smooth sail this year despite the global downturn. "Out of the 70 per cent of sales generated from exports, the US contributes only 12 per cent. Revenues have been increasing for the last four years on stronger demand from the Middle East and Russia and orders for bigger boats. "The company's sales are rising by 20 per cent a year by selling yachts that cost at least €2 million ($3 million.) Clients that want a 'mega-yacht,' which are 45 metres long and sell for at least €40 million are on a waiting list until 2012," he adds.
© Gulf Business 2008
