Investing in British Waterways
Marina Development Opportunities in England and Wales
Opportunity awaits investors in development of new marinas in England and Wales. The United Kingdom has a vast network of inland boating canals and rivers operated by a public organization known as British Waterways (BW). This organization manages some 3,200 kilometers (2,000 miles) of public waterways. Boaters ply the waters in traditional canal narrowboats and other craft. A visit to Andrew Denny's website for his vessel the Granny Buttons will give you a flavor of the lifestyle.
Moorage Demand - Boating in Britain is thriving and demand for waterway infrastructure is steadily growing. Historically BW expanded moorage capacity by adding moorings along the banks of the canals, known as online mooring. Consumer demand is for purposefully built, offline marinas that offer better amenities and can access the canal system. Forecast of unmet demand for inland marina moorage exceeds 11,700 berths in the next ten years. This would represent the need for 47 new marinas with a capacity of 250 vessels.
Partnerships - British Waterways is actively seeking Public Private Partnerships (PPP) to meet the intense demand for vessel moorage. BW is prepared to support investors throughout the planning, regulatory and project development process needed to construct a new boating facility. The case is market demand and the premium paid for offline marinas will benefit British Waterways and marina investors working in a partnership to build new facilities.
An Investment Model - Investment returns predicted by BW are based on a standard marina with a capacity of 250 berths. Basic specifications are:
- A land area of 7.5 hectares (18.5 acres) with a waterspace area at 2.7 hectares (6.7 acres)
- Berthing density of 94 berths per hectare (2.5 acres)
- 250 vessel berths with average boat length of 15 meters (49 feet)
- Use of fixed height docks with basic utility services for vessels
- Upland support services including ships stores, fuel, brokerage and service
- Five residential vessels paying a premium for moorage
- Annual moorage of £120 ($250 USD) per meter net of Value Added Taxes (VAT)
- Access roads, utilities, landscaping and security
Investment Costs and Returns - British Waterways estimates the standard model marina would cost £2.55 million ($5.2 million USD) subject to environmental sensitivities of the location. Estimated revenues for mooring and ancillary services are £630,000 ($1.28 million USD) per year. Operating costs, fees and taxes are pegged at £430,000 ($871,000 USD) for possible earnings before interest and taxes of £200,000 ($405,000 USD). These assumptions are found in more detail at the British Waterways Inland Marina Investment Guide website.
Granny Buttons skipper Andrew Denny says that partnering with British Waterways could be huge opportunity for marina savvy entrepreneurs and he may be right. Boating & Sailing at Suite101 isn't however going to start providing investment advice in this forum. A person with extensive personal knowledge of marina management and the financial capacity to build a new marina might be interested in further investigation of the public private partnerships being proposed by British Waterways. It certainly is an interesting story of how the government can work with private partners to finance much needed waterfront infrastructure.
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