New build versus brokerage

The new build versus brokerage decision is framed in trade press as a matter of taste: custom expression versus immediate availability, bespoke versus practical. The framing is wrong. The decision is a matter of risk profile, capital commitment timing, and the quality of the buyer's representation. The financial and operational consequences diverge sharply over the next decade.

The two paths, honestly described

Brokerage is the purchase of an existing yacht. Time from offer to delivery is typically 6 to 12 weeks; capital is concentrated at closing; the yacht is a known quantity to the extent the survey reveals it. The buyer takes the seller's specification, build quality, wear and tear, and accumulated maintenance debt. The risk profile is read once, at survey, and accepted.

New build is commissioning a yacht to specification from a shipyard. Time from contract to delivery is 24 to 36 months for semi-custom and 36 to 60 for fully custom. Capital is committed in stage payments: typically 20 to 30 percent at signature, 50 to 70 across the build, balance at delivery. The yacht is bespoke; everything from hull form to door handles is specified by the owner and the design team. The risk profile is open across the entire build window.

The cost premium of new build over a comparable brokerage hull is typically 30 to 50 percent at entry, narrowing to 15 to 25 percent at delivery as the brokerage hull depreciates and the new build hits the market. Over a five-year hold the gap closes further; quality builders (Feadship, Lurssen, Royal Huisman, Vitters) hold value materially better than brokerage acquisitions of comparable size.

The commercial case is therefore not "it costs more but it's worth it for the customisation." It is that for a buyer with a 7 to 10 year hold horizon, a use pattern that depends on bespoke specification, and a competent representation team, new build is sometimes the lower total cost over the hold period despite the higher headline price. Without those three conditions, new build is materially worse.

What goes wrong in new build

The published evidence on new build dispute is dominated by buyer-side governance failures. Three documented cases illustrate the pattern.

REV Ocean, the research and expedition vessel under construction by Vard (Fincantieri) for Norwegian industrialist Kjell Inge Røkke, designed by Espen Oeino, was originally targeted for 2021. The project paused 2021 to 2023 over published technical and weight issues. The vessel is being lengthened by 12 metres; outfitting is now with Damen Shiprepair and delivery is late 2026 to 2027. A yard-side performance dispute rather than a buyer-side governance failure, but illustrative.

Project Somnio, the 222 metre residential vessel associated with Carl Le Souef and Captain Erik Bredhe, generated a UK High Court ruling in January 2025 (Winch Design Limited v Le Souef [2025] EWHC 120 (Comm)) that Le Souef was personally liable for GBP 733,750 in unpaid invoices to Winch Design. Le Souef had argued the contract was with Somnio Superyachts Pty Limited, an SPV; the court found any objective bystander would have read the contract as identifying Le Souef as the contracting party. The buyer-side governance failure: contracting personally, or with structuring that did not survive litigation.

The Italian Sea Group restructuring of April 2026, in which the Court of Florence granted four-month protection through 16 July 2026 preventing shipowners from terminating in-build contracts, illustrates yard-side financial distress. The order implies multiple in-build clients were ready to walk. The buyer's contractual position was subordinated to the yard's restructuring through a court order.

These are the published cases. Most disputes settle privately under LMAA confidentiality. The published record is enough to make the point.

Yards going under, owners holding the bag

There is a separate pattern, less covered in trade press, that has emerged over the past five years. A yard runs into financial difficulty mid-build. The owner is presented with a choice that is not really a choice: inject additional capital, sometimes as equity in the restructured business, or face the yacht stalling, the supplier chain freezing, and the work-in-progress becoming an asset of the insolvency.

Nobiskrug, the German builder of Sailing Yacht A, is the cleanest recent example. Then under Tennor Group (Lars Windhorst), the yard filed for insolvency in December 2024 alongside FSG. Lurssen acquired the assets in early 2025; the yard was integrated into the neighbouring Lurssen-Kröger facility, over 95 percent of the combined workforce transferred under a transfer-company mechanism, and suspended in-build projects (including a 62 metre yacht) moved to Lurssen for completion. Owners with hulls in the yard at insolvency faced direct exposure: contracts novated to the acquiring entity, terms renegotiated, in some cases additional payments requested to cover trustee costs. The principal who imagined the contract held the price quoted at signature found that insolvency law sits above the contract.

Italian Sea Group’s April 2026 restructuring (Admiral, Tecnomar, Perini Navi, Picchiotti, NCA refit) extended the logic into procedural protection. On 20 April 2026 the Court of Florence confirmed protective measures retroactive to the 16 March filing for a maximum four months. The order prevented shipowners from terminating in-build contracts during the restructuring window: from the buyer's perspective a court-mandated commitment to a counterparty whose financial condition had changed since signature.

The pattern is the same. The buyer pays stage payments forward; when the yard's financial condition deteriorates, those stage payments become creditor positions in someone else's insolvency. Refund guarantees protect a portion of the exposure in principle; in practice, particularly under non-tier-one bank wrappers, they are less reliable than the contract suggests. Norton Rose Fulbright's commentary on Chinese-bank refund guarantees expiring within one month of cancellation is widely cited; the timing of insolvency proceedings rarely lines up with the guarantee window.

Three implications for a first-time buyer. Yard financial due diligence at heads of terms is not optional: recent published accounts, parent structure, order-book composition, and litigation history are part of standard pre-contract assessment. Refund guarantee credit quality matters as much as any other contract term. The buyer should anticipate that if the yard runs into trouble during the build, an equity-injection or accelerated-payment option will be presented as the only route to delivery; whether to accept is worth deciding in advance, with counsel.

A second variant of yard equity is worth distinguishing from the distress case. Some smaller, founder-led yards offer customers an equity position in the building entity as part of the contract structure, on the basis of mutual alignment. Pendennis is the practitioner reference, although the firm does not publish the structure. Where it works, the buyer holds a minority equity position for the duration of the build, the yard is incentivised to deliver to specification, and any yard underperformance is partially absorbed at equity level rather than entirely at customer level. Rarely available to first-time buyers; the structural test is whether the position aligns yard incentives with the buyer's and survives counsel review as corporate governance rather than as a marketing wrapper.

The new build contract is where inexperience gets priced. The cost overrun appears later, but it was paid for at signature.

The contract is where it happens

A new build contract is the most consequential document a yacht buyer signs. It governs USD 30 to 200 million of capital across two to five years, and structures every variation, every dispute, every interpretation question in the period during which the yard holds the cards.

Top-tier yards do not contract on industry-standard forms. Standard shipbuilding forms exist (SAJ, AWES, NEWBUILDCON, SHIP 2000); SAJ is most used globally and "thought to favour the shipyard" in unamended form. But the European yards that matter (Lurssen, Feadship, Oceanco, Royal Huisman, Heesen, Sanlorenzo, Benetti) do not contract on any of those. They contract on heavily customised in-house templates drafted by their counsel, with English law and London arbitration grafted on.

Hannaford Turner's Justin Turner notes engagement typically begins at request-for-proposal stage, not after heads of terms are signed. The buyer who does not retain specialist shipbuilding counsel before signing is being asked to negotiate a bespoke document drafted entirely by the yard's lawyers, against standard forms the buyer's representative has likely never seen.

Ten specific points an inexperienced representative gives away at signature:

1. Stage payment loading. Shipbuilding industry typical: 50 to 70 percent of contract value paid before delivery (Watson Farley & Williams). Aggressive front-loading suggests the yard is short of cash to start the build.

2. Refund guarantee credit quality. Tier-one bank pay-on-demand guarantees are materially better than surety wrappers. Chinese-bank refund guarantees commonly expire one month or less after cancellation, forcing immediate arbitration (Norton Rose Fulbright).

3. Liquidated damages cap. Industry typical: 1 percent of contract value per week of delay, capped at 5 to 10 percent of contract sum. After the cap, the yard owes nothing further (Hill Dickinson, citing Triple Point Technology v PTT [2021] UKSC 29).

4. Force majeure burden. English law requires the yard to prove "but for" causation under Classic Maritime v Limbungan [2019] EWCA Civ 1102. Yards routinely write looser clauses; weak reps accept them.

5. Change order procedure. Without a defined procedure with pre-agreed unit rates and third-party quote rights, "the owner is open to being forced to pay for change orders or emergent work at a unit rate much higher than in the original contract" (Stephenson Harwood, Sean Gibbons).

6. Defect notification deadlines. Typically 14 days from discovery, with failure to notify potentially extinguishing the claim entirely (HFW).

7. Warranty length. Standard 12 months. Negotiable to 24. Most inexperienced reps do not negotiate it.

8. Cancellation thresholds. SAJ standard: 150 days post-delivery date or 180 days total delay (Jiangsu Guoxin v Precious Shipping [2020] EWHC 1030). Bespoke yacht contracts replicate but with negotiable thresholds.

9. Title position during construction. Some yards (Feadship cited) retain title until delivery; others transfer progressively. This determines who carries insolvency risk and who has repossession rights.

10. Dispute forum. English law plus LMAA arbitration is the practitioner default. Inexperienced reps sometimes accept non-English law or non-LMAA seats that materially weaken the buyer's position.

A single afternoon's competent legal review at heads-of-terms saves more than the owner's representative fee for the entire project. It is consistently not done.

SYBAss founded YORP because the gap was structural

SYBAss, with IAMI and the GUEST guild for chief stewards, launched the Yacht Owner Representative Programme (YORP) in July 2023; four courses, 200 hours, founding member Benetti. The Yacht Owner's Representative Register (YORR) followed in November 2024, administered by the Superyacht Alliance for Professional Standards in Malta, with a CV audit “to eliminate inflated CVs” and a code of conduct. Theo Hooning, then SYBAss Secretary General, on the launch: “as yachting becomes increasingly professionalised, there has been a corresponding recognition of the importance of proper training.”

The institutional movement is the story. SYBAss member yards (Lurssen, Feadship, Oceanco, Heesen, Royal Huisman, Vitters, Baltic, Abeking & Rasmussen, Codecasa, CRN, Benetti, Sanlorenzo) collectively build roughly two thirds of yachts over 40 metres. They do not stand up an industry register without a problem they want fixed.

The strongest single anecdote on the published record comes from Jack Inglis at ULTIMAR. Writing in Superyacht Investor: a semi-custom new build where the owner deputised a family-office CFO with no maritime expertise as owner's representative. The delivery snag list exceeded 1,200 items; the family office had reported around 100. Inglis's framing: vessels poorly overseen during construction "return back to the yards for warranty works quicker than they are delivered."

Yard-side voices have been consistent in published interviews. Tony Gale (ICON Yachts) in BOAT International, September 2025, on the value of a professional owner-side team to brief clarity and project execution. Tim Kershaw (Dunya) and Richie Blake (Doehle) have made similar published comments. Kevin Laverty (Hill Robinson) in BOAT International on the relative thinness of yacht-construction contracts as drafted: one widely cited example was a 33-page contract for a 77 metre yacht against the multi-volume documentation typical of oil and gas projects of comparable cost.

The owner's representative market

The independent owner's representative market is structurally undersized and structurally conflicted. Genuinely independent firms, paid only by the owner, with no broker commission and no yard affiliation, are a small group. They include A2B Marine Projects, ULTIMAR, Divergent Yachting, Mariner Technical Services, Praxis Marine, JMS Yachting, ABL Yachts, KRM Yacht, Saor Alba, Occam Naval Architecture and Project Management, and the publisher of The First Owner’s Reference.

Brokerage houses with new build arms include Edmiston, Burgess, Y.CO, Ocean Independence, Camper & Nicholsons, Fraser, Cecil Wright, and Moran. Burgess Technical Services markets itself as offering "independent, objective oversight" while Burgess is one of the largest brokerages globally. Cecil Wright topped the Spear's 2025 Yacht Advisers ranking and acted as owner's representative on the 83m Feadship Project Solent; Cecil Wright is a broker. The dual-role conflict is structurally identical at every scale.

Technical departments at the major brokerage houses are publicly described as project management; privately they are understood as the eleven-at-night phone call when something has gone wrong in the yard, the relationship that keeps the brokerage close enough that when the next transaction comes they are the first call. The technical department is the mechanism for staying in the room.

For the largest houses the transaction volume supports the standing cost of the team. For most it does not. The team is a bet held on the balance sheet against future commission. The question is whether the brokerage needs to own the resource to capture the outcome; some are finding that a trusted external partner delivers the same continuity at a fraction of the standing cost.

Yacht management companies extending into new build include Hill Robinson, Doehle Yachts Technical Services, and Wright Maritime Group. Naval architects acting as owner's representatives include Vitruvius (Briand), Reymond Langton, Espen Oeino, Bannenberg & Rowell, Andrew Winch, and Newcruise. The naval-architect conflict mirrors the broker conflict: the design firm has a continuing commercial relationship with the yard.

Family-office-focused entrants are post-2023: Ikonic Yachts, Superyacht Partners, Praxis Group, Oak Group, Morpho Luxury Asset Management.

Fees at the major firms (Edmiston, Burgess, Cecil Wright, Y.CO, Moran, Hill Robinson) are not published. Independents rarely publish percentages either. Anecdotal practitioner range for genuine independents is 1 to 3 percent of build cost, or fixed fees of EUR 1 to 3 million over a 36-month build on a EUR 100 million project. Brokers acting as owner's representatives are typically paid via yard commission of around 5 percent, so the dual-role firms make more from the buyer's side without disclosing it. The lack of published fee structures across the entire market is itself a finding.

The wider build team

An owner's representative on a serious new build leads a team. The specialist disciplines around the lead role determine how much of the yard's first-draft position the owner is able to test. Yards do not refuse to be asked for these; they quietly hope they will not be asked.

Maritime counsel from a specialist shipbuilding firm leads the legal workstream. Hill Dickinson, Watson Farley & Williams, Stephenson Harwood, HFW, Reed Smith, Norton Rose Fulbright, and Ince are the regularly named firms. They cover the construction contract, change-order procedure, warranty terms, title during construction, finance and security, and flag and ownership structure.

Mechanical and propulsion advisors review engine selection, gearbox specification, shaft line, propeller geometry, and hybrid or diesel-electric integration where relevant. On larger hulls the propulsion package is a multi-million-euro line item that the yard's first quote rarely optimises for the owner's actual operating profile.

Vibration analysis engineers run finite-element models early in the build, then sea trial measurements at acceptance, against published comfort-class targets (Lloyd's Register PCN, RINA Comfort, ABS Habitability). Comfort-class failure at delivery is one of the most expensive defects in the warranty period; the cause is almost always not running the analysis early enough to influence shaft line, mounts, and structural detailing. Acoustic engineers work alongside on the same framework (sleeping-space and saloon noise typically 45 to 55 dB(A) under cruising load); the two scopes are normally bid as a paired engagement.

Paint surveyors are their own discipline. Yacht paint is a six- to nine-figure line item on a 50 to 80m hull, applied across many coats in conditions where humidity, surface preparation, and cure schedule determine outcome. Wrede Consulting, IMS Paint Surveying, and a small number of independents write the specification before the yard quotes, then run progress inspections and cure tests. Paint disputes are the most common single category of post-delivery warranty argument; independent paint oversight is the cheapest way to avoid them.

Interior consultants, engaged independently of the lead designer where that designer has yard affiliation, validate joinery, fabric and leather grades, climate behaviour through commissioning, and the long lead-time items that drive the back end of the schedule. Class society consulting, distinct from the class society's own role, validates the path to certification at Lloyd's Register, DNV, ABS, or RINA, including any yard-proposed innovations that may interact with the regulatory pathway.

The total cost of the assembled team on a EUR 100 million build runs EUR 2 to 4 million across a 36-month project, against a build cost the yard's first-draft contract typically allows to drift by 5 to 15 percent. The discipline is in commissioning the team early enough to be heard.

The decision

For a buyer considering new build, the threshold tests are these.

First, do you have a 7 to 10 year hold horizon? If not, brokerage. The new build cost premium does not amortise over a shorter hold.

Second, is your intended use pattern materially specific to the yacht (size, layout, propulsion, range, operational profile)? If a brokerage hull within a reasonable search window can deliver 80 percent of your use case, brokerage. Custom is for the residual 20 percent that genuinely matters.

Third, can you commit to the team-building discipline that new build requires? Independent owner’s representative engaged before contract, specialist shipbuilding counsel from a top firm, technical due diligence on the yard’s current order book and financial condition, and a willingness to push back against the yard’s first-draft contract on every point that matters. If commitment to all four is not in place, brokerage tends to be the calmer path.

If those three threshold tests are positive, new build at a SYBAss member yard is one of the great purchases a UHNW principal can make. Without those conditions, it tends to be one of the more expensive ways to acquire a yacht. The case in this chapter is for the conditions, not against the path.