Inside Wealth

Olympics Over, London Wants Super-Yachts to Stay

Belinda Liversedge, Financial Times
The 414ft luxury yacht 'Octopus' owned by Microsoft co-founder, Paul Allen, is moored in South Quay on the Isle of Dogs on July 23, 2012 in London, England.
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London’s Docklands played host to 10 of the world’s most prestigious super-yachts over the summer months, as their owners converged on the city for the Olympics.

Now, Docklands administrators are seeking to capitalize on the games, which they believe have demonstrated that London is viable as a super-yacht venue.

“The Olympics has opened people’s eyes to the fact that you can get super-yachts to London,” says Gareth Stephens, harbor manager for London Docklands.

The sight of the 126-meter Octopus belonging to Microsoft’s co-founder Paul Allen, and the 74-meter Ilona owned by the Westfield Group chairman Frank Lowy nestling among the City’s tower blocks at West India docks, was perhaps the most visible statement of London’s potential.

But the docklands infrastructure did not tick every box in a super-yacht owner’s list of features for an ideal location. While Octopus was moored on Thames Quay in relative privacy, the democratic nature of space allocation meant some owners were more exposed to public gaze.

The Indian steel magnate Lakshmi Mittal cancelled his mooring reservation two weeks before the start of the Olympics when he discovered his yacht would be moored next door to HMS Belfast, a working museum.

Owners also needed to prepare for the experience of negotiating locks. But most seemed to accept it with good grace. Mr. Allen, who had paid £1,500 ($2,428) for the service, tweeted: “Getting Octopus thru London locks a tight squeeze, 1 meter clearance.”

London’s dockland administrators are confident they can make improvements to infrastructure and services for any future super-yacht mooring demand.

“If super-yacht companies thought yachts were coming here long-term, then the infrastructure will come,” said Ben Sutton of MGMT, the global yacht advisory company that provided super-yacht concierge services during the Olympics.

Plans are in place to improve infrastructure at St. Katherine’s Dock, near Tower Bridge.

Arguably better equipped to accommodate super-yachts than West India Dock, it has inbuilt security options, including a protected enclave, gated areas and 24-hour CCTV. There is also an investment plan to improve berthing and the dockside area.

William Bowman, a former consultant at the luxury yachting experts Camper & Nicholsons, has been appointed Marina director to make St Katharine’s Dock “the finest marina in the U.K.”

London’s berthing prices during the Olympics were not cheap. With a minimum booking period of 21 days, an owner of a 60-meter super-yacht paid £5,250 a day. A yacht of more than 100 meters paid £9,500 ($15,300) a day. So Octopus, for example, was paying £66,500 ($107660) a week for its berth, which did not include water and electricity. Against these prices, the notoriously expensive Venice Yacht Pier, which charges £1,580 a day for berths, looks modest by comparison.

Normally, London Docks charges £540 ($875) a week for a 30-meter yacht – which at £18 a meter a week makes it one of the world’s cheapest city marinas.

In contrast, for a yacht of the same size, New York’s Newport Marina charges £2,001 ($3240) a week, and Marina Port Vell, Barcelona, asks £2,100. These prices reflect the five-star luxury services and state-of-the art infrastructure in leading super-yacht marinas.

Beyond the facilities and pricing, a more telling question is the extent to which super-yacht owners will want to visit London in their boats.

The U.K. capital offers some of the best shopping, nightlife and museums in the world, and the City is one of the world’s leading financial centers. But will that be enough to enable it to compete with the blue waters off Sardinia, St Tropez and Martinique?

Yacht captains, however, may be attracted to London for more practical reasons.

Many of the world’s best shipyards are in northern Europe, including the Netherland’s Feadship, and Lürssen in Germany, within easy reach of London.

Captain Robert Bleecke of Olympics charter super-yacht Sea Bluez, said: “I, for sure, would stop over if en route, say, from a north European shipyard while on sea trials, or an owner’s first shakedown cruise or trip up to the Baltic.”

With this in mind, Super-yacht UK, a representative body for the U.K. super-yacht industry, has plans to promote a “great northern route” taking in London, the Baltic and the U.K.’s coastline.

A colder, more hardy cruising itinerary may not prove a winner with the majority, however.

One motor yacht captain, looking after a 63-meter vessel, said: “As much as the south coast of England or the north-west coast of Scotland can be attractive to some clients, it wouldn’t necessarily appeal to the majority of summer charterers of a vessel of our size.”

It may, however, be reasonable for London to hope that a steady demand in small numbers may build as a consequence of the Olympics.

Infrastructure growth is likely to be demand-led to avoid the kind of empty marinas that have resulted from hasty expansion in an unfulfilled belief that if provision is made, the yachts will come.

But it is possible that London may see more yachts such as Octopus gracing its docks in years to come.