Majorca Properties

Since the late 1960’s and early 1970’s, and the start of tourism and package holidays, Spain has been transformed into one of the leading European economies, with a diversified market covering both the manufacturing and service sectors. Between 1961 and 1973, the so called years of development, the Spanish economy grew at 7% a year with a per capita income of $500 per year. After joining the EU in 1986, Spain once again had one of the world’s fastest growing economies, with annual growth averaging 4.1% in the period between 1986 and 1991, compared with an EU average of 3%. Likewise, foreign trade grew from $23.8 billon in 1975, to $52.5 billion by 1980, and to $143 billion by 1990.

Today, the economy of Spain is the fifth largest in Europe, accounting for around 9% of EU output. Income, at 78% of the EU average, is among the lowest in the EU, although it is well ahead of Ireland, Portugal and Greece. Spain’s main trading partners are France, Germany and Italy for exports, and Germany, France and Italy for imports. Spain’s most important industries include tourism, chemicals and petrochemicals, heavy industry, and food and beverages. Spain is also Europe’s fourth largest manufacturing country after Germany France and Italy. The principle growth areas include tourism, insurance, property development, electronics and financial services. Tourism is one of Spain’s most important industries, especially in Andalucia, earning approx. 4% of GDP and employing some 10% of the workforce, both directly and indirectly. With over 5,000 kms of coastline, and a unique blend of almost perfect year round weather and Mediterranean lifestyle, Spain has become a Mecca for holidaymakers and boating enthusiasts alike.

With the advent of the low cost airlines, a weekend trip to Spain has now become the norm for many European travellers, and the huge Eastern coast, all 750 miles of it, is still home to more British boats than anywhere else in the Mediterranean. Whilst the booming economy and influx of foreign visitors in the seventies and eighties certainly caused it own unique problems, the development of smart marina complexes such as Sotogrande, and the hosting of the 2007 Americas Cup in Valencia, are undoubtedly attracting the boating enthusiasts back in huge numbers. Increasingly, many of these enthusiasts are also buying second homes, either as a holiday home to enjoy their boat on trips to Spain, or indeed to retire.

In terms of demographics, the generation of buyers termed the ‘baby boomers’ (currently 42 – 58 years old), is now due to retire within the next 10 years. With considerable wealth, which has been built on property, business interests and inheritance, they have little desire to see these assets taxed on death. This trend is now being seen throughout Europe, and in a cultural change, this age group is retiring earlier, spending more of its wealth, and in general enjoying life to the full. In the UK, this exodus which was once a small trickle has now become a torrent. Increasingly wealthy, and healthy, individuals are moving abroad, encouraged by the media and low cost travel, in order to enjoy a more relaxed and enjoyable life in the sun. With global demand for recreational boats estimated to reach $24 billion by 2006, projected growth of annual sales worldwide of 7%, and with Europe experiencing the highest growth in the last five years, there seems little to stop the European market growing and expanding further in the next few years.

Owning and maintaining a boat in Spain is becoming easier, cheaper, and considerably more enjoyable than the UK. With the advent of cheap flights, more scheduled services, and new infrastructure, it is easier and quicker to reach the Spanish coast and be on the water, than it is for an owner in the Midlands to reach his boat in Southampton. The Spanish coastline is divided into six Costas – the Costa del Sol is the most southerly, followed by the Costa Calida, Costa Blanca, Costa del Azahar, Costa Dorada and the most northerly, the Costa Brava. The atmosphere on Spain’s coastline varies enormously from Costa to Costa and from marina to marina. From the small and beautiful Cabopino to the glitzy Puerto Banus, where yachts are squeezed in purely to be admired by the less well off passers by! Major cities such as Valencia, Almeria, Malaga and Barcelona offer marina facilities right at their centre, an option that is becoming more popular as many cities are being turned into world class destinations. Valencia in particular is beginning to rival Barcelona, as the impending America’s cup has drawn billions of euros of investment into the area. Marinas and boating facilities on both sides of Valencia such as Denia, and areas to the south of the city, are feeling the benefits.

The islands of the Balearics cover a tiny fraction of the Mediterranean, yet are perhaps one of its most popular cruising areas, and as such are the most densely populated with boats. In recent years Mallorca has shed its night club image, and a huge marketing campaign has pushed the relatively unknown and more beautiful aspects of the island. A recent article in the Majorca Daily Bulletin outlined the amount of money being invested in property and yachts on the island by UK city traders. With bonuses in excess of 1m euros, these buyers not only want a house, but a yacht to match. This, like elsewhere, has led to unprecedented demand for mooring space. Whether boat owners want a quiet laid back marina, or one with a busy night life, the one thing they all have in common is a lack of adequate berths, both in size and availability.

The shortage of berths in the Mediterranean is getting worse. There are currently an estimated 160,000 boats waiting for a long term space and skippers lucky enough to have one are sitting tight. Only recently, a report commissioned by the Spanish Government concluded that in 2005, a total of 2,300 yachts will be looking for berths in Andalucia alone, and by the year 2020 that this figure would leap to over 5,000 yachts in just this one area. The report concludes: The demand from the nautical sector of the tourism market, on the Costa del Sol alone, is reaching unprecedented figures, which can only be remedied by a dramatic upgrading of facilities. Indeed the 11 ports on the coast, which cater for yachts, only have 4,200 mooring points between them. Figures issued by the Costa del Sol Tourist Authority suggest the Costa’s ports would need to increase by 300% the number of available mooring spaces just to satisfy current requirements.

The Director-General of the Costa del Sol Tourism, Ana Gomez said “We are lacking many mooring points and because of this waiting lists are tremendous”. She went on to explain that due to the marinas being at saturation there was little benefit to be had from marketing and promotion. Nearly 60% of owners were tourists predominantly from Germany, France and the UK. With the lack of availability, prices of berths have risen dramatically, along with the annual rentals demanded by owners. This has compounded the problem, as investors are now moving into the market with the prospect of long term capital growth, coupled with excellent rental returns of between 8% and 15%. Berth prices vary enormously and depend on several factors, including the size (length and width), location (both of the marina, and position within the marina itself), and the length of lease remaining. In general they start at 50,000 euros approx. and go to several million for the very biggest. As an example there is currently a 20m berth in Sotogrande for sale at 600,000 euros – a similar size berth in Puerto Banus would sell for well over a million (if one were available!)

When a new marina is established, it is leased to the port operator by the Government for a fixed period. These periods are normally between 30 and 50 years. The berths are then bought and sold on a leasehold basis only. Gradually over time, the length of the lease left on a berth becomes shorter depending on the date the original lease was granted to the port operator. Typically berths will have leases remaining of between 15 and 25 years. Naturally in a brand new marina, the berth would have a full term lease. Each berth will have its own escritura, essentially a land title document, which is signed and witnessed by a notary in any sale or purchase. Each berth is defined by its size and a reference number on the port authority plan. Berths are always quoted in length and width ie. (8m x 3m).The bigger the boat, the wider the berth has to be! Berths are bought and sold by brokers. The largest of these is Genus Marine Leisure, who has been working in Spain for nearly 20 years. The prices for any particular berth are dictated by supply and demand, and with so much experience, Genus know all the marinas intimately and can therefore price their berths to sell at sensible market prices. If it is considered that the owner is asking too much, the berth sale is refused. In some marinas it is only possible to buy the berth, but not to rent it out to someone else (this was a condition of the original lease to the port authority). We can supply a list of these (if required). In these marinas boat owners can only use the berth themselves. Sailing conditions in the Mediterranean are virtually perfect, as there are no tides to cause problems either in sailing conditions or in entry or exit to marinas. In the UK (as elsewhere) trips have to be planned extremely carefully to ensure that the boat can both leave and enter the port with the tide. This can mean waiting for hours for the correct conditions – something that never happens in the Med! In the UK, boating is restricted to the summer months (3 at best) – more and more owners are now moving abroad to have access to 12 months of sailing in warm and calm water.

Motor boat enthusiasts tend to berth around the Costa del Sol marinas for two reasons. Firstly the diesel in Gibraltar is substantially cheaper than in Spain. Secondly the weather conditions are smoother and calmer. (The Costa de La Luz facing the Atlantic is noted for its windy conditions and attracts the windsurfers) Sailing enthusiasts tend to berth further North, towards the Balearics, as there is generally more wind, and therefore better sailing conditions. In Spain, as elsewhere throughout Europe, there is an extremely strong environmental lobby which has grown in strength in the last decade, particularly with the election of Green MEP’s to Brussels. Throughout the world, environmentally sensitive areas are being protected and designated as areas of outstanding natural beauty or as nature reserves. The argument for building more berths has never been stronger, but neither have the environmental pressures on an already developed coastline.

The Spanish Costas, and particularly the Coast del Sol, have been warned of impending environmental catastrophe if development is not brought under control. The Government is an extremely awkward position, since eco tourism is destined to be a major growth market in the next decade. However it is also acutely aware of the lack of facilities and berths for boat owners and operators. Plans for new marinas are constantly proposed, but generally drag on for many years through lengthy planning and lobbying meetings. Motor boats in particular are not considered to be environmentally friendly. Accidental fuel discharge and emptying of tanks in port (accidental or otherwise) do not help. Whilst the Green lobby is fighting to prevent further marina development, the availability of berths becomes more acute. In Italy recently, a new law has been introduced banning motor boats from coming within 200m of the coastline, making it illegal to anchor in rocky inlets and coves.

All of this helps to push prices of berths even higher. Berths that were selling for 10,000 to 20,000 euros a few years ago, are now changing hands for 80,000 to 100,000 euros. This trend can only continue with the lack of new marinas being built. As a specialist marine financial services company Marinablu offers a unique facility with our Spanish banking partners to provide berth finance, tied directly to the berth itself. This facility is only available via ourselves. This allows our clients ( whether boat owners or investors ) to raise capital against the berth itself. Existing owners are also able to release equity from their berths to buy a bigger boat or simply to re-invest in another berth.

PS-We are currently selling one of our berths in Estapona – a 25m berth – please email for more details.