A major Japanese company is setting up in the UAE to buy and sell boats abandoned in marinas around the Emirates.
TAU Corporation targets abandoned boats
A major Japanese trader of used boats and yachts is opening an office in Dubai to snap up the numerous abandoned vessels in marinas around the Emirates.
TAU Corporation, which reported sales of ¥104 billion (Dh4.84bn) last year, hopes to use its huge buying power to out-muscle local brokers that cannot take ownership of boats but merely act as middlemen between buyers and sellers.
"There is so much dead stock in the UAE, half of the boats have owners that want to sell but cannot find a buyer," said Reza Sheikhi, the assistant manager for TAU Corporation's emerging UAE business.
Many boat enthusiasts took on huge loans to pay for their expensive toys in the boom years before the global financial crisis.
With the onset of the downturn, many buyers found themselves jobless or over-extended and unable to make payments on their boat loans.
"There were private owners that escaped the country during the recession because they could not pay the loans on the boats, so banks and insurance companies now own them, but they do not know how to sell them," said Mr Sheikhi.
TAU is to sign a deal with a local boat agent next week and aims to open an office in Dubai Airport Freezone by the end of the month.
The company plans to buy boats throughout the country and market them via its website, as well as through agents around the world.
"We will sell from Australia to Russia, where there are many good customers," said Mr Sheikhi. "There are many countries outside the Middle East that will buy."
Berend Lens van Rijn, the owner of Belevari Marine, a yacht charter based in Abu Dhabi, said the used-boat market in the UAEwas so well supplied that most vessels sold for 30 per cent less than the international market value.
"Everyone is definitely now looking for a bargain," he said. "For distressed sales, you can get boats for about half the market price."
Many banks and insurance companies have continued to maintain the boats they repossessed during the economic slump in a bid to preserve their value, often even continuing to pay captains and crews.
"There are many insurance companies and banks that, if you offer to buy their boats, they are ready to sell," Mr Sheikhi said.
TAU Corporation is based in Saitama in Japan and exports cars, boats, spare parts and cosmetics to more than 100 agents in different countries around the world.
It employs more than 300 people worldwide, with offices in Russia, New Zealand and Australia.