Grand Harbour Marina goes public
Sails beneath St Angelo
Nicholas Maris and Simon Arrol are in Malta to meet stockbrokers, and to wrap up the final details on the upcoming share offer by Grand Harbour Marina p.l.c.
Mr Maris is the chairman of the company which set up the marina at Vittoriosa and runs it, together with the international boating operation Camper & Nicholson. Both he and Mr Arrol are shareholders in a personal capacity.
The other shareholders are Maltese companies - Portosalvo Holdings Ltd and V & F Portelli Ltd.
Grand Harbour Marina holds rights to the berthing area and some of the land on a 99-year contractual lease from the government. Its berths are each sold on a 25-year lease, allowing for resale three times over before the 99 years are up. Some of them are rented on a temporary basis, or to yachts that call in for a brief visit. Over and above the capital outlay for the leasehold, yacht-owners must pay annual berthing fees and service charges. These account for 90 per cent of the marina's annual revenue. Grand Harbour Marina can accommodate yachts up to 100m long,
Its most famous leaseholder so far is Tom Perkins, the American venture capitalist who owns the Maltese Falcon. This futuristic sailing yacht, styled on a 19th-century tea clipper, has been the cover story on almost every international boating magazine of the past few months.
"This marina is fantastic for super-yachts," Maris says. "The setting is just spectacular. We've given half the available area over to them, making this one of the largest super-yacht marinas in the world - and I have to say it, one of the most beautiful."
In the Mediterranean, competition for the Vittoriosa marina's super-yacht berths comes from the east coast of Spain, the Balearic Islands, northern Italy - where there is a new development in Genoa, and the south of France.
But all those super-yacht berths are full.
There is limited berthing in Croatia, Athens, Lebanon and Turkey. Yet demand for berths is set to surge upwards as the 700 super-yachts currently being built to order come on stream.
"This business is astonishing," says Mr Arrol. "In 1984, there were just 200 yachts over 30m in the entire world. Now there are almost 3,000 and another 700 on order."
The reasons why more super-yacht marinas aren't being built are the straightforward one of geography and the political one of environmental concerns.
"You need a particular kind of geography for a super-yacht marina," Mr Maris explains. "Deep water, for a start, and amenable terrain - also, you can't have super-yacht berthing in the middle of nowhere, for reasons of security and convenience. Then there's the environment. There are very few parts of the Mediterranean coast that can be touched without damage to the marine habitat. That's partly the reason this marina is so unique: it has been a port for many hundreds of years already."
And, they point out, rather than damaging the marine environment in Vittoriosa Creek, the marina has improved it. The installation of a sea-water circulation system has cleared up the stagnation, and the marine growth on the underside of the pontoons has given it a natural boost by acting as a filter.
Grand Harbour Marina has certain competitive advantages. The location is superb and leasehold prices are low compared to those of the mature marinas - though the price of a 25-year lease on a super-yacht berth below Fort St Angelo reaches €5 million. The shortage of super-yacht berths in the Mediterranean has forced some of the big boats to anchor offshore in the calmer months - most spend the winter in the Caribbean - or in a commercial port. "That's hardly the most salubrious of surroundings," says Mr Maris. "In a commercial port, you're surrounding by merchant shipping."
So why are Mr Maris and Mr Arrol selling 30 per cent of their shareholding in the company, with the other two shareholders doing the same?
"One of the reasons for investing in a company is to realise capital growth on your shares, besides deriving revenue from the shares you retain. We will all retain 70 per cent of our present shareholding," Mr Maris says.
"There's a more important reason, though. As things stand, boat-owners are buying 25-year leaseholds from a private limited company. Despite our good standing, sound reputation and solid financial backing, a private company can't offer as much comfort to those entering into a 25-year contract as can a public company which is listed on the stock exchange. With a public company, everything must be clear and transparent, and there are very stringent corporate governance regulations, and monitoring by the financial services authority.
"Going public puts Grand Harbour Marina on a better business footing. It places the company in an advantageous position when it comes to project development and financing. That's why we're doing this."
Mr Maris is the chairman of the company which set up the marina at Vittoriosa and runs it, together with the international boating operation Camper & Nicholson. Both he and Mr Arrol are shareholders in a personal capacity.
The other shareholders are Maltese companies - Portosalvo Holdings Ltd and V & F Portelli Ltd.
Grand Harbour Marina holds rights to the berthing area and some of the land on a 99-year contractual lease from the government. Its berths are each sold on a 25-year lease, allowing for resale three times over before the 99 years are up. Some of them are rented on a temporary basis, or to yachts that call in for a brief visit. Over and above the capital outlay for the leasehold, yacht-owners must pay annual berthing fees and service charges. These account for 90 per cent of the marina's annual revenue. Grand Harbour Marina can accommodate yachts up to 100m long,
Its most famous leaseholder so far is Tom Perkins, the American venture capitalist who owns the Maltese Falcon. This futuristic sailing yacht, styled on a 19th-century tea clipper, has been the cover story on almost every international boating magazine of the past few months.
"This marina is fantastic for super-yachts," Maris says. "The setting is just spectacular. We've given half the available area over to them, making this one of the largest super-yacht marinas in the world - and I have to say it, one of the most beautiful."
In the Mediterranean, competition for the Vittoriosa marina's super-yacht berths comes from the east coast of Spain, the Balearic Islands, northern Italy - where there is a new development in Genoa, and the south of France.
But all those super-yacht berths are full.
There is limited berthing in Croatia, Athens, Lebanon and Turkey. Yet demand for berths is set to surge upwards as the 700 super-yachts currently being built to order come on stream.
"This business is astonishing," says Mr Arrol. "In 1984, there were just 200 yachts over 30m in the entire world. Now there are almost 3,000 and another 700 on order."
The reasons why more super-yacht marinas aren't being built are the straightforward one of geography and the political one of environmental concerns.
"You need a particular kind of geography for a super-yacht marina," Mr Maris explains. "Deep water, for a start, and amenable terrain - also, you can't have super-yacht berthing in the middle of nowhere, for reasons of security and convenience. Then there's the environment. There are very few parts of the Mediterranean coast that can be touched without damage to the marine habitat. That's partly the reason this marina is so unique: it has been a port for many hundreds of years already."
And, they point out, rather than damaging the marine environment in Vittoriosa Creek, the marina has improved it. The installation of a sea-water circulation system has cleared up the stagnation, and the marine growth on the underside of the pontoons has given it a natural boost by acting as a filter.
Grand Harbour Marina has certain competitive advantages. The location is superb and leasehold prices are low compared to those of the mature marinas - though the price of a 25-year lease on a super-yacht berth below Fort St Angelo reaches €5 million. The shortage of super-yacht berths in the Mediterranean has forced some of the big boats to anchor offshore in the calmer months - most spend the winter in the Caribbean - or in a commercial port. "That's hardly the most salubrious of surroundings," says Mr Maris. "In a commercial port, you're surrounding by merchant shipping."
So why are Mr Maris and Mr Arrol selling 30 per cent of their shareholding in the company, with the other two shareholders doing the same?
"One of the reasons for investing in a company is to realise capital growth on your shares, besides deriving revenue from the shares you retain. We will all retain 70 per cent of our present shareholding," Mr Maris says.
"There's a more important reason, though. As things stand, boat-owners are buying 25-year leaseholds from a private limited company. Despite our good standing, sound reputation and solid financial backing, a private company can't offer as much comfort to those entering into a 25-year contract as can a public company which is listed on the stock exchange. With a public company, everything must be clear and transparent, and there are very stringent corporate governance regulations, and monitoring by the financial services authority.
"Going public puts Grand Harbour Marina on a better business footing. It places the company in an advantageous position when it comes to project development and financing. That's why we're doing this."