Exclusive: Why owning a home at sea makes financial sense for the wealthy

The Mathews wake up to new vistas outside their balcony every few days. It could be either Antarctica , Madagascar, Galapagos Islands , French Polynesia or Indonesia, depending on what expedition their residential ship is on that particular week. The couple own an apartment on The World, the largest private residential ship globally, and have been living on board for eight years. “The average span of residents living here is five to seven years,” says Mr Mathew, who changed his name to protect his privacy. “We live six months a year on board the ship — that is the average. We have made very close friends who we travel with, have dinner and do activities with. It is a close-knit community and we share a passion for adventure, travel and exploration.” They represent the quintessential well-heeled home owners on The World, which comprises 165 residences at sea ranging from studios to three-bedroom homes. But buying a slice of this sought-after lifestyle doesn’t come cheap, with prices ranging from $2 million to $15 million, plus annual ownership costs, says Andy Dinsdale, residential director of The World. The annual ownership charges are apportioned according to the size of the home, so the larger the home, the higher the contribution. These fees include a resident’s share of ship maintenance, operations, fuel, crew compensation and food and beverage on board. It also offers residents access to the most exclusive destinations, enrichment programmes, Michelin-level dining, as well as health and wellness services aboard the ship. The Bahamas-flagged 196m-long, 12-deck vessel was launched in 2002 and circumnavigates the globe. Concierge staff arrange customised experiences to exotic locations for residents, who come from 20 countries, including the US, the UK, Australia, New Zealand, Zimbabwe, Japan, Uruguay and Brazil. The Covid-19 pandemic seems to have inspired high-net-worth individuals to escape to far-flung parts of the globe in search of luxury and seclusion. This type of superyacht living is also becoming more popular as more working-age people embrace a nomadic lifestyle. This has resulted in luxury private residential boats becoming big business. Other players are also vying for a slice of the pie, such as Somnio, which will come online in 2024, and Njord, scheduled for delivery in 2026. “When we were younger, say 10 years ago, as Americans, we would mostly travel to Europe. But living aboard The World, we get to visit places that I could never have imagined going on my own,” Mr Mathew says. “We can explore the world from the comforts of our own home.” He and his wife pick Antarctica, the Solomon Islands, Vanuatu, the Raja Ampat Islands in Indonesia, Greenland, the Northwest Passage and Svalbard, Norway, where they went snorkelling with whale sharks, as their most memorable expeditions organised by The World. The average resident on board is about 64 years and “is a self-made entrepreneur whose business success has afforded him or her the wealth to purchase a home on the ship and the time to travel”, Mr Dinsdale says. “Some residents are still active in their business(es), while others are semi-retired or retired.” A typical resident prefers to sail for three to four months. The length of stay on board the ship is up to each resident. Several of the current residents spend most of the year on board the ship, according to the residential director. Average occupancy on board The World is 150 to 200 residents, which provides an intimate atmosphere, he says. Occupancy peaks during the summer months and December. Prospective residents in The World must have a net worth of $10 million or a net income after taxes of $1 million for each of the most recent two years and foreseeable future years, according to the company’s brochures. In addition, they must have “acceptable” references, no criminal record and two letters of recommendation from existing apartment owners on The World, other than the seller. A background check will be conducted for all prospective owners. In addition, a security deposit is required for each owner and is held in an interest-bearing account for the duration of ownership. Insurance of the apartment and the ship, including casualty and property damage, is included in the annual operating costs. Purchasers are also required to pay a transfer fee when buying an apartment on board. There are 44 studios, 20 one and two-bedroom studios and 104 apartments with two, three or more bedrooms in The World. “The original inventory of apartments was sold out in June 2006,” Mr Dinsdale says. “From time to time, there are a small number of resales for purchase.” For instance, a two-bedroom apartment is up for sale now as the owners are said to have purchased a “beautiful house” in Italy. Since only resales are available to purchase, most apartments are sold fully furnished, including linen, kitchen appliances and tableware. Modifications to the apartments may be made with the board’s approval and at the resident’s cost, according to the brochure. “The average length of time to sell an apartment is six to nine months,” it says. “Payment terms are negotiated between the seller and the buyer. While the terms are almost always for cash, a few sellers have occasionally agreed to short payment terms.” The ship is renovated every three years at a dry dock and is funded through annual contributions. An itinerary committee and the ship’s captain choose eight routes around the world, then shortlist it to three and put it to vote by the residents’ board of directors. This is done three years in advance, Mr Mathew says. The World management tries to add 20 new ports each year and never repeats an itinerary. On average, the ship stays at each port for three days. Residents will welcome the New Year in Dubai. The ship will sail across every ocean to six continents, with more than 108 ports of call. Other amenities on board include daily housekeeping, six restaurants, spa and gym, lectures by Nobel laureates, a medical centre with a full-time doctor and nurse, a clothing boutique, internet and phone access, a golf simulator, putting greens, what is said to be the only regulation-size tennis court at sea, a helipad, theatre, billiards room and video games. The World is primarily an adult ship. No pets are allowed on board. “With satellite speed increasing, there are many working people on board,” says Mr Mathew. “This helps us to maintain a good communication schedule, but time zones can be a challenge.” Living on board a residential yacht such as The World is the perfect alternative to individual yacht ownership as it offers services and amenities that would be challenging to achieve on one’s own. Common yacht ownership challenges such as crew recruitment, planning an itinerary and looking after the staff are eliminated by buying an apartment aboard The World, says Mr Mathew. Many residents have owned or considered owning their private yacht, Mr Dinsdale says. “The initial investment of owning your own yacht is significantly higher and the annual operating costs are substantial, all of which are paid by the owner, regardless of how often the yacht is used,” he says. “An equivalent travel experience with the same standard of luxury, including lodging, dining, private car service and first-class flights, could easily cost $500,000 or more on a semi-annual basis.” Other advantages include reduced maintenance, fuel, berthing and docking costs since fees associated with maintaining yachts are typically overlooked, Mr Dinsdale says. The World also allows certain apartments to be rented out to qualified prospective new residents to enable them to sample the lifestyle aboard before reaching a purchase decision. However, due to the exclusive, private nature of The World, guest access is limited and by invitation only. Guests will need to undergo a rigorous security and background check. “Owners can invite guests to stay on board in their apartment or rent a unit under the Guest Stay programme,” Mr Dinsdale says. “Access to the ship is carefully controlled. It is not possible to enter the ship without a special invitation, security screening and proper identification. The ship’s journey is carefully planned and adjusted if needed to avoid areas of conflict or other hazards.”

Exclusive: Why owning a home at sea makes financial sense for the wealthy

Residential ships that offer itinerary planning and a customised luxury service for the super rich are becoming popular