ASIA’S NEW ARTY MUSCLES/POWER HOUSES/FROM STRENTH TO STRENGTH
|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.
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.
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)