ASIA’S NEW ARTY MUSCLES/POWER HOUSES/FROM STRENTH TO STRENGTH
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| Abstraktes Bild, 1986, Gerhard Richter. |
Along with these new investments in infrastructure, an
entire eco-system of auction houses, galleries and fairs has been developing to
accommodate and promote tastes of the fast rising spending power of Asia’s collectors.
Booming auctions
Last month, Bonhams moved into a bigger office space in Pacific Place that gives the British auction house the opportunity for the first time to have
a dedicated salesroom within its Hong Kong office and it will put that space to
good use ahead of the Spring auctions this month. In doing so, it is following in
the footsteps of Christie’s and Sotheby’s which have both in recent years
opened similar dedicated spaces that allow them to hold special selling
exhibitions, “off-season” auctions, along with talks and other events for their
customers. The strengthening of the auction houses’ presence in Hong Kong has
been a reflection of their rising turnover in and from the region.
In 2013, Christie’s global sales rose 16 percent to $7.13
billion, the highest sales total of any auction house in the history of the art
market, while rival Sotheby’s, which celebrated its 40-year anniversary in Hong
Kong that year, also had what its Chairman and Chief Executive Officer Bill
Ruprecht described as a “remarkable year” with consolidated sales of $6.3
billion, a 17 percent increase
on 2012.
According
to Christies’ data, demand for Asian art continued to increase strongly to
$940.6 million in 2013, up 42 percent year-on-year. And while its sales in
Europe ($2.1 billion) were still double those of Asia’s ($977.5 million) —
which now includes auctions in Hong Kong and Shanghai — the increasing
importance of buyers from Greater China in the global art market was evident:
They now account for 22 percent of Christie’s global sales, and spent 63
percent more compared with 2012.
“With
only two auction weeks a year, Hong Kong has risen from a level of sales of
$350 million in 2009 to over $900 million in 2013, slowly catching up with
London King Street ($1.3 billion) where auctions are held every week! Our
strategy and plans should lead to a smaller gap over the coming years,” said
Chairman of Christie’s Asia Pacific François Curiel in an interview with
Singapore Business Review.
The
emergence of Hong Kong as a key international auction centre on a par with
London and New York has been further reinforced by the presence of other
auction houses establishing a base there in recent years. Tiancheng
International, set up in 2011 by former director of Christie’s China, Wang Jie,
has found a niche specializing in jade jewellery, fine Chinese paintings and
contemporary Chinese art, while large Chinese auction houses China Guardian and
Poly Auction have started holding regular auctions in Hong Kong since 2012, a
move that has raised their international profiles. “In Hong Kong we are able to
reach not only local clients, but also buyers from Singapore, Indonesia, the
United States and various countries in Europe,” noted Loretta Lo, Operations
Director at China Guardian (HK) Auctions Co. Ltd, adding that having held only
three auctions in Hong Kong, it was still too early to speak of general trends,
but noting, “we were pleased to see sales at each of the auctions exceeded our
estimates.” In 2013, China Guardian’s combined sales in Hong Kong totalled $104
million, accounting for roughly 10 percent of the Beijing-based auction house’s
overall sales.
In
Singapore, the auction business also remains healthy even though both
Christie’s and Sotheby’s stopped holding sales there in 2002 and 2008,
respectively, moves that at the time helped consolidate their efforts in Hong
Kong. Boutique auction houses, such as Larasati Auctioneers and 33Auction, have
been holding regular sales in the city-state, catering mainly to the more niche
market of Southeast Asian art.
“Apart
from 2008-2009 when Asia felt the full impact of the world's financial crisis,
our business in Singapore has been steadily growing at a rate of 10-15 percent
yearly,” said Daniel Komala, CEO of Larasati Auctioneers. “In fact 2012 and
2013 had witnessed growth of over 20 percent. Our sales have gone up by three
to four times compared to what we achieved when we first entered the market 11
years ago,” he added.
33Auction
has also seen its sales improving, growing turnover from $6.93 million in 2009
to $11.74 million in 2013, according to David Fu, Specialist for Modern and
Contemporary Asian Art at the auction house.
Komala
estimates that the Singapore auction market itself has grown tremendously from
a mere $8-12 million back in the early 2000s to some $30-40 million last year.
“However, this is just a drop in the ocean compared to what we witness in Hong
Kong. The auction market is worth billions of dollars there,” he said, adding
that while Singapore has “done well” in Southeast Asia, it remains “definitely
50 years behind Hong Kong in the art auction business.”
The
biggest sticking point that has slowed growth in Singapore’s auctions has been
the current tax of 7 percent on goods and services, that simply cannot compete
with Hong Kong’s “zero” VAT, he explained.
The “Fair” Attraction
The
vibrancy of the Asian art market and the appetite of Asian collectors can be
further seen in the growth in the number of galleries in the region, and this
is an area where Singapore has managed to keep up with Hong Kong, thanks in
part to the support of the government.
“In Hong
Kong, the growth has been organic and largely reliant on the Mainland
market. Singapore started later and the art hub [in Gillman Barracks] was
created and stimulated by the government. Although we work independently,
without any government interference, the art hub is managed and overseen by the
government.” explained Sundaram Tagore, owner of the New York-based Sundaram
Tagore Gallery, which has outpost in Hong Kong and Singapore who also pointed
out that the smaller auction scene may actually have helped, “There is less
activity from auction houses in Singapore and, therefore, the galleries are
thriving.”
Magnus Renfrew, who heads Art Basel in Hong Kong, pointed
out that while international galleries like Gagosian, White Cube and Platform
China, are now calling Hong Kong home, it has been more challenging for many young
galleries to emerge due to the “reality of overheads,” notably rents.
Another indicator of the growing gallery market is in the
mushrooming of many new art fairs across the region, with Hong Kong now
boasting of the largest international art fair in Asia, Art Basel in Hong Kong,
while Art Stage Singapore has managed to carve its own niche, attracting over
45,000 visitors this year, up 16 percent on the previous year, by focusing more
on Asian art, in particular
that from Southeast Asia.
Renfrew
noted the art world in Asia has been changing as collectors have also
been evolving, making it a prime location now for galleries and fairs to build
on the growing appetite for a range of art. “Prior to 2008, most Asian
collectors were primarily relying on the auction houses as a barometer of
artistic value: the higher the price, the better the quality. But there is a difference between speculation
and investment, and collectors are now seeing the importance of the galleries
system that offers the reassurance that an artist is on the right trajectory
and will have longevity,” Renfrew explained. “Auction houses have no
responsibilities for the long-term prospects of an artist’s career, while a
gallery will be working hard to do the right thing, making sure the artist’s
work is placed in the right collections, that his work does not become the
object of speculation, placing it with collectors who will not flip it
immediately at auction,” he argued.
“Collectors
like the transparency of the auctions in terms of value and I think the
endorsement of auction houses like Sotheby’s and Christie’s does give them a
sense of security. But buying at a fair like Art Basel in Hong Kong is also now
offering a sense of security and a sign of quality because collectors know the
galleries that are presented at our fair have gone through a rigorous selection
process through peer review,” Renfrew said, pointing out the fair received 500
applications this year for 245 slots.
Reacting
to the apparent demand from collectors, new art fairs have developed over the
past couple of years, particularly in Singapore which is viewed as an ideal,
and secure, location between East and West. This year, there will be more than
10 art fairs taking place in the Lion City, including for the first time two editions
of the Affordable Art Fair that has already proven a useful testing ground for
emerging artists in the region and has given confidence to new buyers and
budding collectors prepared to “take a punt” on artworks.
“The art
scene in Singapore is dynamic and growing, and as a result we felt it was time
to expand the Affordable Art Fair concept in Singapore based on the demand,”
said Camilla Hewitson, the fair’s director, adding that the decision to move
from one to two fairs this year was taken in response to the number of
galleries looking to take part. “We thought it would be better to have a second
edition rather than expand our annual fair and risk losing that special
atmosphere that we have established, and to make sure that we stay true to the
Affordable Art Fair mantra,” she added. Although some of the same galleries will
exhibit in each of the two fairs, most of the artists represented by them will
be different, an effort that should help keep fair fresh and interesting.
The
Singapore art fair scene will this year see two new entrants: the Milan Image
Art (MIA Fair) Fair, which selected Singapore as its first international
outpost and will launch its inaugural edition there October 23 to 26, and the
Singapore Art Fair (Me.Na.Sa Art), a new boutique fair aiming to focus on
emerging artists from the Middle East, North Africa, and South and Southeast
Asia, to be launched Nov 27-30.
Changing tastes
While
Western collectors’ appetites for Chinese art shows little sign of waning,
collectors from China and Southeast Asia are increasingly venturing out of
their own “comfort” zone, buying art from countries other than their own,
though they are more drawn to well established names than contemporary works,
much as Japanese collectors were back in the late 1980s. “Femme Assise en
Costume Rouge sur Fond Bleu” by Picasso and “Untitled” by Jean-Michel Basquiat
were both purchased by Chinese collectors last year at Christie’s New York for
$8.3 million and $29.2 million, respectively, according to Curiel of
Christie’s, while in February, a Chinese collector acquired “Abstraktes Bild” by
Gerhard Richter for $32.5 million at Christie’s London, while another was the
under-bidder to the $11.5 million “Black Hair” by Domenico Gnoli.
“Chinese
collectors have become increasingly active in non-Asian categories and we
expect this to continue as they have more opportunities to learn about these
sectors through our exhibitions and lectures,” Curiel said.
Most
encouraging for galleries, fairs and auction houses has seen the emergence of
new buyers. First-time buyers represented 30 percent of all bidders at
Sotheby’s sales globally last year, while a similar percentage at Christie’s in
Hong Kong were new buyers and this increased to 50 percent for Christie’s sales
in Shanghai. The rapid increase in disposable income amongst Chinese
entrepreneurs is being clearly reflected in the number of new collectors
wishing to acquire artworks and luxury items, but the strong sales numbers also
reflect the auction world becoming more accessible thanks to technological
innovations such as online bidding, internet only auctions and e-catalogues.
“The art and auction markets have never been so attractive and approachable for
potential buyers all over the world,” Curiel said.
AS for Published in Singapore Business Review (May 2014)
AS for Published in Singapore Business Review (May 2014)