The last 12 months pre Covid saw a more even performance across major marine sectors, with stable business activity across domestic and overseas markets, driven by gains in boat and equipment manufacturing.
Despite this sentiment remained cautious with uncertainty over the UK’s post Brexit relationship with the EU persisting. The UK Marine Industry Trends November 2018 – June 2019 (last published statistics) suggested that there had been little change in the trading environment for marine businesses: industry growth remains flat, pegged back by political instability and uncertainty.
In an effort to retain customers and attract younger boat owners marina operators are offering more flexible berthing packages and developing marinas as leisure and tourism hubs in a bid to attract a broader customer base.
There are a number of proposals for new marinas across the country however these are mainly in conjunction with housing and commercial development. The sector remains extremely fragmented with relatively few group operators and with many operated as private or family businesses, although with some consolidation in recent years.
Moorings provide a steady and sound level of income which will always underpin value, but the overall value of the property is often influenced by the value of the other businesses and availability of residential accommodation, attaching values to the immediate residential values and fluctuations.
Marina values are driven primarily by levels of income, security of occupancy, and the level of investment required to maintain them and deliver ongoing trading performance.
Boat owners’ main priorities when considering mooring sites are location, access, security, quality of the mooring, site maintenance, cost, quality of facilities, range of facilities and quality of service. The spending of new marina clients is likely to be significantly
higher if an attractive level of security and facilities can be provided.
Prospective purchasers include existing marina operators, private investors and real estate companies/funds, although for smaller properties lifestyle buyers and boat enthusiasts also have an interest.
The level of interest does depend to an extent on the degree of
other facilities offered at the site and the future profit potential.
Marinas rarely come to the market and attract considerable interest from both lifestyle purchasers and the national brands.
Individual marinas are often sold with a house, or a business such as boat repairs, chandlery, retail units, residential property, public house, a mobile home park and or a restaurant. These ancillary activities can cater not only to the marina’s own mooring customers (resident and visiting) but also the general public.
Marinas, and particularly coastal marinas, rarely come to the market but analysis of individual sales indicate an 7.14% to 10% yield requirement (10 – 14 multiple) where a stable trading position has been established and there is little reliance on higher risk income.
This excludes non-income securing elements such as residential accommodation or surplus land. However, this does not take into account the scarcity factor, and current levels of interest appear to indicate that those properties and portfolios which are coming to the market, after many years with a lack of stock.
British Marine’s Industry Overview indicates the following key facts:
- Revenues from inland marina berthing income grew 8% to £83m in 2019/20.
- Net Profits accounted for 21% of revenues and grew 21% to £18m.
- The sector’s direct Gross Value Added (GVA) contribution to the UK economy through Marina berthing income grew 13% to £38m or 46.4% of total sector revenue.
- The workforce supported by inland marinas grew 0.8% to 1,249 full-time equivalent employees, with employees earning an average of £22,550.
- Inland marina businesses are optimistic about their market, with 59% of members positive about their company’s prospects, citing a boom in second-hand boat sales and a surge in demand for berths over the last year
- However, operators also voiced concern at the large increase in first-time liveaboard and residential boaters, significantly adding to congestion on the inland waterways, discouraging experienced boaters and helping to create an unstable demand ‘bubble’ for boats and berths.
- Occupancy rates for October 2020, at the start of the low season, averaged 86% across all inland mooring providers.
- The yield per berth, a key metric for marina berthing productivity,alongside occupancy, grew 10% to £2,993, due to a surge in demand and rising inflation after lockdown.
- With this surge in demand, 54% of inland marinas responding to the survey are looking to expand over the next 12 months, which would increase inland marina berthing capacity by an estimated 5%.