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Millennial Jet Set: By Arnaud Tellier, BNP Paribas Wealth Management

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Superyachts and business jets are passion investments for the super-rich, and both appeal to Asia’s new generation of high-flyers.

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Amadea is a 106m superyacht built by Lurssen and exclusively listed for sale with Imperial; © Imperial (Photo: Guillaume Plisson)

At BNP Paribas Wealth Management*, we see a younger generation of UHNW individuals transforming the broader luxury landscape in Asia. This change is marked by a move from accumulating tangible assets to pursuing rare, tailored experiences.

EVOLVING SUPERYACHT INDUSTRY
Today, owning a superyacht is not about making a statement but maximising the way an owner utilises their resources and time, both of which are scarce. And of course, the memories created on board will last long after returning to shore.

A superyacht is a floating piece of real estate. It enables people to work, have fun and gather with family, friends and business partners in a private environment, all while enjoying a five-star, world-class service comparable to the best resorts and Michelin-starred restaurants.

The Asian superyacht market is dominated by models from 30 to 35m. Superyachts of 40m and above are rare in Asia. Having said that, we see more and more Asia Pacific tycoons buying yachts of 50m and above, and docking them in the Mediterranean, the Seychelles and the Caribbean.

Hong Kong is the largest hub for yachts in Asia Pacific, supported by mooring facilities including the Aberdeen Marina Club, Hong Kong Gold Coast and the new Lantau Yacht Club. It has been observed that more Europe-based yachts are visiting Thailand (Phuket in particular) and Indonesia.

Australia and New Zealand could hold increasing appeal around the America’s Cup early next year, while the Summer Olympics in Japan could draw international yachts as well.

There are still obstacles for the development of yachting in Asia such as the stringent regulations for cruising from one country to another, complexities around chartering, and the lack of marinas and infrastructure for mooring and refit.

At an industry level, more lobbying is necessary to convince governmental bodies to ease restrictions and further invest in infrastructure. The impact of the Covid-19 pandemic may bring some positive changes.

In a recent move, the Thai government is exploring the potential of high-end foreign superyacht tourism. Such luxurious tourism may generate substantial revenues from the use of local suppliers to high-spending UHNWIs patronising local stores and resorts.

GROWTH IN ASIA’S BUSINESS JET MARKET
Southeast Asia is still seeing growth in total numbers of business jets, while the market has stabilised somewhat in Greater China, where it is being driven mostly by replacements of existing jets.

Dassault is introducing the ultra-widebody business jet with its new 6X

According to a 2019 fleet report published by Asian Sky Group, the total number of regional aircraft (including those in India) was 1,213 at the end of 2019, of which 518 were based in Greater China. Superyacht owners in Asia are very discreet and rarely publicise their ownership. Confidentiality is part of the experience and the value proposition.

This is also true for jets. Asian clients are notably keen on buying long-range and ultra-long-range models. In many other markets, customers would initially start buying a small jet or even a turboprop to begin with and then gradually step up to bigger models. In Asia, we have seen many first-time business-jet owners buying at the top end of the market.

New models such as the Bombardier Global 7500 and Gulfstream G700 are changing the game. With larger cabins allowing for four or even five separate ‘living spaces’, they also have a longer range than previous models. Dassault is also introducing the ‘ultra-widebody’ business jet with its new 6X. Demand for these aircraft has increased in the last five years, even as the trade war changes the market.

Seletar Airport in Singapore and Hong Kong International Airport are popular for business jets, and the new airport in Beijing is also expected to become a hub. Jet activity is increasing in Southeast Asian countries such as Thailand, Vietnam and Indonesia.

Interestingly, we have recently seen consolidation of, and investment in, business jet maintenance and repair operations (MROs) in the region. Jet Aviation expanded its presence by acquiring Hawker Pacific’s MRO two years ago, Dassault Aviation took over ExecuJet’s APAC MRO early last year, and Bombardier has been investing massively in a new service centre in Seletar.

MILLENNIALS ARE THE FUTURE
BNP Paribas Wealth Management finances the upper end of the business jet and superyacht markets, catering for superyachts of 40m and above, and medium to ultra-long-range business jets.

Arnaud Tellier: “We are actively playing our part by offering carbon-offset programmes, impact investment solutions, and promoting and supporting NGOs active in these fields through a ‘tick and donate’ initiative.”

Our clients generally have a net worth of US$500 million or more. We are very selective in the clients and the assets we finance, and we operate in a niche market, completing a handful of transactions each year.

We have worked with several next generation UHNWI, who like their parents, are investing in business jets and flying privately.

The situation for yachts is a little different. Most of these clients received a Western education and have since introduced the yachting lifestyle to their parents and enjoy family time on-board.

Millennials are truly concerned about global warming, CO2 emissions and ocean preservation. From an industry perspective, the business-jet manufacturers and superyacht builders are working hard on their value proposition to attract millennials. These manufacturers and shipyards want to be part of the solution, not the problem, and they are constantly innovating to produce more environmentally friendly products.

As a leading global private bank, BNP Paribas Wealth Management is committed to green finance. We are actively playing our part by offering carbon-offset programmes, impact investment solutions, and promoting and supporting NGOs active in these fields through a ‘tick and donate’ initiative.”

We are actively playing our part by offering carbon-offset programmes, impact investment solutions, and promoting and supporting NGOs active in these fields through a ‘tick and donate’ initiative.

When it comes to financing environmentally friendly yachts, fuel efficient diesel-electric yachts, or explorer vessels having a scientific and educational purpose, BNP Paribas Wealth Management is willing to go the extra mile.

BNP Paribas Wealth Management has accumulated vast experience in yachting over the last 15 years, and we are willing to share this knowledge of the industry with our clients and introduce them to the leading shipyards, brokers and yacht-management companies in Asia and Europe.

BNP Paribas Wealth Management understands that a superyacht or business jet is more than just an asset – it is a personal expression of taste, style and success. By working closely with our valued clients, we have gained the trust and respect of UHNWIs across the world.

Reach out to the Jet and Yacht Financing team (jyf@bnpparibas.com) and find out how BNP Paribas Wealth Management can help you.

* BNP Paribas Wealth Management is the business line name for the wealth management business conducted by BNP Paribas.

ARNAUD TELLIER

 

Arnaud Tellier is CEO, Asia Pacific at BNP Paribas Wealth Management and leads a regional team of over 1,100 private banking professionals across key markets in Asia. Tellier defines the strategic direction of the business while overseeing its day-to-day management. He brings a multi-disciplinary approach to serving BNP Paribas’ private banking clients, with a background in capital markets and corporate and investment banking. His efforts in transforming the bank’s offering for Asian clients saw him awarded ‘Private Banker of the Year’ at The Digital Banker’s 2019 and 2020 Global Private Banking Innovation Awards.
www.wealthmanagement.bnpparibas/asi

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