Residential boats are a way to share expenses instead of having your own private yacht. The concept seems reasonable, but there is a rise in prices in the business.
The ship that started the current wave of luxury residences aboard cruise ships was “The World”, operated and managed by ResidenSea. All residences aboard “The World” are already sold out, but occasionally an owner puts one up for sale. If you have to ask the price, you probably can’t afford it.
Residential Cruise Line, LTD. Offers 1 Bedroom 1 Bath 624 sq. Ft. apartments in “El Magallanes” for only $ 2,160,000. A 4 bedroom, 4.5 bath, 4334 square foot unit will cost you $ 15,460,000 to purchase and an annual maintenance fee of $ 542,000.
Not to be outdone, The Four Seasons Ocean Residences has units ranging from $ 3.75 million to $ 39 million, and sizes range from 797 square feet for a 1-bedroom unit to 7,860 square feet for a 4-bedroom unit.
The “Orphalese” plans to launch in 2008. They are offering 200 permanent residences ranging from the 1,000-square-foot 2-bedroom Pegasus Estate to the 3,700-square-foot 5-bedroom Penthouse, which are available for the entire property. 2-bedroom apartments start at $ 1.8 million with $ 30,000 in annual fees, while penthouses start at $ 10 million with $ 78,000 in annual fees.
Voyage Partners has a ship under construction, but has not announced a price yet. When they do, prices will likely fall in the range of the others on this short list of new residential cruises.
Another ship of this caliber is in the planning stages, it will be called “Everest” and it will be 656 ‘in length if or when it is built. It is intended to have 17 apartments and a private suite in the owners’ attic on the upper deck.
“The Orphalese” is the best offer of the group, and I think it is also the highest quality boat. “The Orphalese” is being built at the Aker shipyards in Finland by the same builders who have recently built the world’s largest and best mega-cruise ships, including the largest of all “The Freedom of the Seas” cruises operated by Royal Caribbean. . Also the management of “The Orphalese” seems to be practical. There will also be 265 guest suites available on the ship for cruise ship passengers who do not own residences.
Using the best of the group “The Orphalese” as a benchmark, let’s see how it compares to real world prices.
New cruise ships can be built for around $ 200 million. The most expensive new mega-cruise ships cost around $ 500 million to build.
All current prices for residences aboard cruise ships are outrageous. The rich apparently like to waste their money. It must be a matter of status spending more money than the Joneses. For those who prefer not to spend money trying to outspend the Joneses, there is a better way.
Occasionally, a cruise line may have a new ship under construction and run into financial difficulties. They may be forced to abandon the construction project and an unfinished ship may be left idle in a shipyard. There are ships of this type available now. One in particular is the following:
725 ‘725ft./221m 12-DECK UNFINISHED PASSENGER VESSEL
Year: 1990
Current Price: US $ 15,000,000
Located in the mediterranean
Hull material: steel
Engine / Fuel Type: Twin Diesel
725ft / 221m Unfinished 12 Deck Passenger Ship
Steel hull and superstructure built in Poland in 1990, length extended by 50 m / 164 ft. in 1995 in Greece for the original owner who went bankrupt. The new owner is not interested in completing the 13,000 ton cruise (lightship) and is now at the stage where our competent boat builders can complete it in record time as per the buyer’s specific requirements. Also ideal as a floating or ro-pax condominium project. Pricing “as is, where is” with onboard motors, generators and other equipment (see list below) is $ 15 million, or can be completed turnkey in 20 months for $ 130,000,000. Located in the Eastern Mediterranean.
The above-mentioned “turnkey” price of $ 130 million is based on the completion of the ship at the Elefsina shipyard in Greece. It would be unwise to do that with this ship. Greek shipyards get very few new construction projects these days, and for good reason. Trade unionists in Greece are doing a very good job improving wages, benefits and working conditions for shipyard workers in Greece. Unfortunately, they also slow down work and increase costs.
The sale price of this boat is less than the price of a large apartment at “The Magellan”. The selling price and the selling price are two different prices. This ship could probably be bought for about $ 11 million. It would be foolish to finish this ship in a Greek Union shipyard. It can be towed economically to nearby shipyards in Tuzla, Turkey. The ship can be finished there faster, for about half the price, and with better craftsmanship. This ship could be bought and finished to a high standard equal to that of “The Orphalese” for a total cost of well under $ 100 million (maybe even as low as $ 60 million). It can be finished on request, with each residential unit customized to suit its owners. The finished product would be a brand new, completely modern ship with luxury homes on board that would be at least as good or better than anything on the market.
That still seems like a big change. But this is a large ship and would easily accommodate 200 luxury residential units and an additional 200 conventional cruise cabins such as “The Orphalese.” Average cost of residential units would be less than $ 500,000. That would mean that the smaller residential units would cost much less than the average price. Furthermore, with two hundred (more) additional conventional cruise cabins, cabin owners could recoup much of the operating costs and thus virtually eliminate “maintenance fees” for themselves. The expense for the owners can be less than 10% of the prevailing rates if the buyers did not have to pay some skillful promoters and sellers, but simply bought the boat directly themselves sharing the real costs by dividing the ownership of the boat among the buyers. Why would anyone want to pay ten times more money to buy and much higher maintenance fees for a similar residential unit on board? The only reason I can think of is to impress others with how much money they can afford to throw away.
Used cruises are an even bigger bargain. Look at the specs of the following unfinished conversion boat for sale:
UNFINISHED YACHT FOR SALE
OWNER’S PRICE USD1 MILLION
FULL SPECIFICATIONS, GA AND LIST OF AVAILABLE EQUIPMENT
GREEK FLAG
ROMANIA BUILT / 1988
LAST ON DRY DOCK 1997
DIMENSIONS 116.40 X 14.20 X 5.20 METERS DRAFT
TRB / TRN 3430/2000
23 DESTINED KNOTS
HELIPORT DESTINED
ACCOMMODATIONS FOR 81 PEOPLE
CREW FACILITIES FOR 93 MEMBERS
Again, the sale price is subject to negotiation. Used boats can be restored to appear practically new and can be adapted to international safety standards (SOLAS). There are shipyards all over the world that can do good quality work at an even lower cost than shipyards in Tuzla, Turkey. If a ship is currently in Greece (like many), Tuzla is the best place to tow it for major shipyard jobs. The “SE” shipyards in the port of Nikolaev, on the Black Sea, Ukraine offer the best value for money in that part of the world. The bottom line is that savvy buyers can get good deals, even on high-end purchases, like a luxury residential home aboard a cruise ship. I keep a list of those who have expressed interest. The list is confidential and will not be shared for marketing purposes. The purpose of maintaining the list is to facilitate joint ownership directly between buyers without intermediaries or developers involved.
