GLOBAL YACHT ADVISORS, LLC.

PROCESS FOR THE SUCCESSFUL BUILD OF A SUPERYACHT

 

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Building a 50m+ Superyacht: Professional Owner's Guide to Shipyard Selection, Design Development, Contract Negotiation, and Construction

Building a 50-meter-plus superyacht is comparable to developing a luxury hotel, a private aircraft, and a commercial vessel simultaneously. The process typically requires 3–5 years from concept to delivery and involves hundreds of millions of dollars in commitments depending on size and complexity.

 

PHASE 1 – DEFINE THE OWNER'S MISSION

Before approaching shipyards, determine precisely what the yacht must accomplish.

 

1. Owner Requirements Definition (ORD)

This becomes the foundation of the project.

 

Operational Profile

• Private use only

• Charter capable

• Worldwide cruising

• Mediterranean-focused

• Caribbean-focused

• Expedition cruising

• Polar capability

• Transatlantic range

 

Key Questions

• Length target (50m, 60m, 70m+)

• Steel or aluminum construction?

• Displacement or semi-displacement?

• Number of guests

• Crew size

• Helicopter capability?

• Submarine?

• Beach club size?

• Tender requirements?

• Swimming pool?

• Wellness spa?

• Cinema?

• Owner's deck?

 

Budget Definition

Establish:

• Construction budget

• Design budget

• Owner supplied equipment budget

• Contingency budget

 

A serious project should carry:

• 10–15% contingency

• Separate budget for post-delivery upgrades

 

PHASE 2 – APPOINT THE OWNER'S TEAM

THE SMARTEST OWNERS HIRE EXPERTS BEFORE SPEAKING WITH SHIPYARDS.

 

Core Team

KEY PERSON - A very experienced Yacht Construction Broker - Advisor (ie. Joe Foggia of Global Yacht Advisors, LLC.) who will compile and coordinate:​

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The Team:

• Independent yacht project managers

• New-build consultants

• Owner's representatives

 

Their Responsibilities:

• Shipyard evaluation

• Contract negotiations

• Cost control

• Technical review

• Construction oversight

 

Naval Architect

Responsible for:

• Hull design

• Stability

• Performance

• Structural engineering

 

Exterior Designer

Creates:

• Profile

• Styling

• Deck arrangements

 

Interior Designer

Creates:

• Interior concept

• Material selections

• Furnishings

• Lighting

 

Maritime Attorney

Critical for:

• Contract drafting

• Warranty protection

• Payment security

• Dispute resolution

 

PHASE 3 – MARKET SURVEY OF SHIPYARDS

At 50m+, only a limited number of shipyards are truly capable.

 

Northern European Shipyards

Typically very custom, high quality and highest cost.

Examples:

• Feadship

• Oceanco

• Lürssen

• Abeking & Rasmussen

Advantages:

• Exceptional engineering

• High resale values if not too custom

• Strong project management

 

Italian Shipyards

Strong balance of good quality and value.

Examples:

• Benetti

• Sanlorenzo

• Rossinavi

• Tankoa Yachts

• CRN

Advantages:

• Strong styling

• Competitive pricing

• Faster delivery

• Great re-sale because of proven sold platforms aimed at the general demographic.

 

Turkish Shipyards

Increasingly competitive and developing quality.

Examples:

• Bilgin Yachts

• Turquoise Yachts

• Alia Yachts

Advantages:

• Significant value

• Flexible customization

• Lower labor costs

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American Shipyards

American made in the United States with good quality. Sensitive to geo-political and environmental issues based on state shipyard is located.

Examples:

• Westport

• Delta

• Burger

​Advantages:

• Convenience for an American Buyer

• Minimal tariffs if registered in the USA

• American quality

• Good re-sale

 

PHASE 4 – ISSUE A REQUEST FOR PROPOSAL (RFP)

Once a preliminary design exists: Prepare a professional RFP package.

Contents

Technical Specification

May exceed 500 pages.

Includes:

• Hull

• Structure

• Machinery

• Electrical systems

• Navigation systems

• AV/IT systems

• Interior standards

General Arrangement

Shows:

• Deck layouts

• Cabin arrangements

• Crew areas

• Technical spaces

Preliminary Weight Study

Critical to project success.

Performance Requirements

Examples:

• 5,000 nm range

• 16-knot cruise

• 18-knot maximum speed

 

PHASE 5 – SHIPYARD DUE DILIGENCE

NEVER BUY BASED SOLELY ON PRICE.

 

Evaluate:

Financial Strength

Review:

• Ownership structure

• Creditworthiness

• Order book

• Litigation history

 

Production Facilities

Inspect:

• Dry docks

• Covered construction halls

• CNC facilities

• Paint facilities

 

Workforce

Assess:

• Employee retention

• Engineering department

• Management team

 

Recent Deliveries

Visit at least:

• 3–5 recently delivered yachts

Interview:

• Captains

• Chief engineers

• Owners if possible

 

PHASE 6 – DESIGN DEVELOPMENT

THIS STAGE OFTEN TAKES 6–18 MONTHS.

Concept Design

Creates:

• Exterior profile

• GA layout

• Initial rendering package

Preliminary Design

Develops:

Naval Architecture

• Hull geometry

• Stability calculations

• Performance predictions

Engineering

• Machinery arrangement

• Tank capacities

• Equipment locations

Detailed Design

Produces:

Structural Drawings

Thousands of drawings.

Mechanical Systems

• HVAC

• Plumbing

• Fuel systems

• Exhaust systems

Electrical Systems

• Power generation

• Distribution

• Automation

Interior Engineering

• Furniture

• Stone

• Joinery

• Lighting

 

PHASE 7 – NEGOTIATION OF SPECIFICATIONS

THIS IS WHERE MILLIONS ARE WON OR LOST.

 

Areas Most Often Negotiated

Speed

Higher speed means:

• Larger engines

• Larger fuel consumption

• Higher cost

Range

Longer range requires:

• More fuel

• More displacement

Noise and Vibration Standards

Premium projects establish:

• Maximum cabin noise levels

• Maximum vibration limits

Measured during sea trials.

Equipment Brands

Examples:

Engines:

• MTU

• Caterpillar

Stabilizers:

• Naiad Dynamics

• Quantum

• SKF

Generators:

• Northern Lights

• Caterpillar

 

PHASE 8 – PRICE NEGOTIATION

The shipyard proposal normally contains:

Base Price

Covers:

• Construction

• Engineering

• Basic outfitting

Escalation Clauses

Negotiate carefully:

• Steel price escalation

• Aluminum escalation

• Currency fluctuations

Owner Changes

Negotiate:

• Change order procedures

• Approval process

• Pricing formulas

Payment Schedule

Typical:

• 10% contract signing

• 10% steel cutting

• 15% keel laying

• 15% hull completion

• 15% launch

• 25% sea trials

• 10% delivery

EVERY MILESTONE MUST BE INDEPENDENTLY VERIFIED.

 

PHASE 9 – BUILD CONTRACT NEGOTIATION

PERHAPS THE MOST IMPORTANT PHASE.

 

Key Contract Sections

Technical Specification

Must be incorporated into contract.

Delivery Date

Define:

• Guaranteed delivery

• Liquidated damages

Performance Guarantees

Examples:

• Maximum speed

• Range

• Noise levels

• Vibration levels

Warranty

Generally:

• 12–24 months

Negotiate:

• Warranty response times

• Worldwide support

Change Orders

Must define:

• Pricing

• Schedule impacts

• Approval process

Default Provisions

Protect against:

• Shipyard insolvency

• Construction delays

• Force majeure abuse

Refund Guarantees

Among the most important protections.

Typically provided by major banks.

 

PHASE 10 – CONSTRUCTION MANAGEMENT

CONSTRUCTION OFTEN LASTS:

30–48 MONTHS

Owner's Representative Role is to monitor:

 

Budget

• Monthly cost reports

• Change orders

• Variations

Schedule

• Critical path review

• Milestone tracking

Quality

• Inspections

• Factory acceptance testing

 

PHASE 11 – SEA TRIALS

THE YACHT MUST PROVE COMPLIANCE.

 

Trials Include

Speed Trials

Range Verification

Stabilizer Testing

Dynamic Positioning

Noise Testing

Vibration Testing

Maneuvering Tests

Emergency System Testing

 

PHASE 12 – DELIVERY & POST-DELIVERY

Delivery Package

Includes:

• Class certificates

• Flag documentation

• Manuals

• Spare parts inventory

Crew Training

Train crew on:

• AV systems

• Automation

• Engineering systems

• Safety systems

Warranty Period

Create:

• Defect tracking system

• Punch list management

• Warranty claim process

 

Recommended Procurement Strategy for a 50m–150m New Yacht Build

Step 1

Hire owner's representative and maritime attorney.

Step 2

Develop Owner's Requirements Document.

Step 3

Select designer and naval architect.

Step 4

Create concept design and preliminary specifications.

Step 5

Issue RFP to 5–8 qualified shipyards.

Step 6

Shortlist 3 shipyards.

Step 7

Conduct yard visits and management interviews.

Step 8

Negotiate technical specifications.

Step 9

Negotiate commercial terms.

Step 10

Negotiate build contract and refund guarantee.

Step 11

Execute contract.

Step 12

Manage build through delivery and warranty.

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