The New Wave of Residence Ships

Theodore W. Scull September 27, 2006

Home at sea

Ever laid eyes on the perfect seaside condominium, then wished it could be shifted to the dream destination of your choice -- perhaps floating along the French Riviera, resting beneath Cape Town's Table Mountain or nestled snugly alongside the Sydney Opera House?

The Griffiths (not their real name -- they prefer to remain anonymous), a couple in their mid-50s, had a similar notion. So they purchased a permanently roving seaside condo onboard The World, a 644-foot, 12-deck ship that came down a Norwegian slipway in March 2002 to cruise the globe continuously. After spending this summer in the South China Sea, it's currently wending its way down the east coast of Australia.

"This is a unique lifestyle that may never be duplicated, although we hear of other efforts to do so,"said Mr. Griffith. "It is not for everyone, but for anyone who enjoys travel, a luxurious lifestyle, adventure, opportunities to rough it -- and doing all of it from the comfort of your own home -- right now, there is no alternative."

See our slideshow of The World and her competition.

It's a success story now, but soon after its launch, the fate of The World was unclear. Buyers initially snapped up the apartments, then sales slowed to a trickle. To keep the venture afloat, investors considered inviting transients on board (at five-star rack rates), but to the owners that sounded suspiciously like a cruise ship. Most wanted privacy, so they took complete control in October 2003, hiring ResidenSea Ltd., a management company, to handle the operations and market the ship.

Now, The World is full. All of the 165 residences are sold, at prices ranging from $825,000 to $7.3 million. That being said, owners have the option to rent their apartments, and some 30 percent do. For the nonowning riffraff, rentals start at $1,250 per day, and include meals, selected beverages, taxes and gratuities.

"Our family and friends don't really understand the concept, and how we can enjoy it so much, until they have sailed with us for a week or more," said Mr. Griffith. "Then we have a hard time getting rid of them."

The Griffiths fit the general demographic profile of the ship -- a semiretired couple with an appropriately stratospheric net worth. With an average age of 52, most owners still work -- property development, real estate and technology are typical fields -- and when aboard pace themselves according to a personal schedule. Forty percent hail from North America, 40 percent from Europe, with the rest of the globe making up the remainder.

For the majority of its population, The World isn't a primary residence, or even a secondary one. It's usually a third property, and sensibly considered much more of a lifestyle choice than a proper investment (consider the fact that land-based residences tend to last much longer). The owners of The World are projecting a 70-year life span, which if reached could achieve some sort of longevity record.

The floating gentry of The World spend about three months in any given year aboard, generally in two- to three-week stretches. The result is about 150 to 200 in residence at any one time, which makes for a small but by all accounts very congenial community. Naturally, the population tends to swell during the Mediterranean legs, and to wane somewhat during the transatlantic slogs.

The residents are rarely in need. The ship features all manner of glittering amenities: jet pools on the veranda, a marble-clad Swiss spa, a golf simulator with personal instruction, a driving range and putting green, a full-size tennis court, four gourmet restaurants, an aft-facing marina for swimming and water sports, a casino, movie theater, occasional nighttime entertainment and a Ping-Pong table. There are emphatically no flesh-and-feather Las Vegas-style extravaganzas or wet T-shirt contests.

The World's itineraries seek by the best climatic conditions, so she may explore Scandinavian capitals in the summer, the Mediterranean resorts in the fall, head through Suez for the winter Down Under along the Great Barrier Reef and then aim northward for spring in exotic East Asian ports. It's a remarkable concept -- a floating city of well-heeled wanderers. Which is why two more are in the works.

Four Seasons Ocean Residences, under a licensing agreement with Four Season Hotels and Resorts, has a conditional contract to build a similar size vessel in a Finnish yard to be aptly named The Four Seasons. Offering mostly whole ownership but also limited fractional shares on a 50-year leasehold basis, 50 percent of the 106 units need to be sold before a shipyard contract is signed. They expect to sign the contract next summer.

Much further along, Residential Cruise Line is offering 200 private residences aboard the considerably larger 70,000-ton, 15-deck Magellan. Residences went on sale in 2005 and purchases have progressed to the point where Randall B. Jackson, an Arizona real estate developer and CEO, says a shipyard contract is imminent, with a completion date set for spring 2009.

What's the primary motivating factor driving these investors? That life is short. Over time it's a lower per-person cost than renting a suite aboard a top-end cruise line like Seabourn or Silversea, but as Mr. Griffith sums it up, "Traveling the world and being in our home at the same time is remarkable and unique."

 

See our slideshow of The World and her competition.

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