May 2013: April Art Market Report

  Safwan Dahoul’s “Rêve 16” offered at Christie’s "Modern and Contemporary Arab,
Iranian and Turkish Art" auction in Dubai on April 16, 2013.

By Shireen Lohrasbe

IN EARLY APRIL, ARTSPACE ACQUIRED VIP ART. According to Andrew Russeth at GalleristNY: “Artspace, a website launched in 2011 that facilitates online sales for more than 100 galleries and nonprofit organizations, has agreed to acquire VIP Art, an art-selling website started by dealers James and Jane Cohan and investors Jonas and Alessandra Almgren as the VIP Art Fair that same year. Though neither side would discuss details, the deal has Artspace taking on VIP’s small staff and Mr. Cohan joining Artspace’s advisory board… Following the acquisition, Artspace could be partnered with more than 200 galleries, assuming VIP’s clients agree to join the platform. The acquisition also brings Artspace’s list of collectors up to some 200,000.”

ON APRIL 9TH, HISCOX IN COLLABORATION with ArtTactic released a report titled “Online Art Trade Report 2013.” Together, the two firms surveyed 101 art buyers, 130 international art collectors (who spend more than £75,000/ $110,000+ per year) and 58 gallery owners and traders of contemporary art.

Key findings: “64% of collectors surveyed bought art (sight unseen) through a website with little knowledge of the artist…This is supported by the fact that 89% of the galleries surveyed regularly sell art to clients on the basis of a digital image only… which opens up significant opportunities for an online art trading and e-commerce market.” Issues of provenance and authenticity are the two main deterrents for collectors purchasing art online, however “price is not the barrier one might assume. 26% of the art collectors surveyed have spent £50,000 or more buying art online (includes buying from a jpeg, but also from online auctions and gallery websites), and 25% of these collectors would be willing to spend £50,000 or more on a single artwork in the future.”

In 2012, online art sales made up 1.6% of total art sales ($870 Million of $56 Billion). By 2017, online art purchases are predicted to reach 19% ($2.1 Billion). Surprisingly, 72% of online purchasers are new collectors. This might be why, as The Telegraph reported, “The level of venture capital invested in the start-ups is staggering, ranging from $4 million for the online auction platform Paddle 8, to $12.2 million for Artspace… and $22.7 million for the recently launched Berlin-based online auction business Auctionata.” Given these findings, the online art trade will grow exponentially within the next five years.

ARTTACTIC RECENTLY PARTNERED with ArtInsight to organize a number of panels hosted at London Business School. The first panel, titled “Art in the Digital Age: Can today's art market prosper online?” featured several experts whose online businesses shape the answer: Jonas Almgren (Artfinder), Ezra Konvitz (ArtStack), Anders Petterson (ArtTactic) and Antony Riand (ArtViatic), moderated by Jeffrey Boloten (ArtInsight).

SOTHEBY’S HONG KONG held two Chinese art-focused sales in early April: “20th Century Chinese Art”, which yielded HK $204,680,250/ US $26,373,664 and “Fine Chinese Paintings”, HK $360,802,250/ US $46,490,452. Other successful auctions included: “Modern and Contemporary Southeast Asian Paintings”, which raised HK $13,056,250/ US $1,682,336 and “Contemporary Asian Art”, HK $129,928,750/ US $16741709.

CHINA’S OLDEST AUCTION HOUSE, Guardian, staged two Chinese art auctions April 4 and 5. Together the sales realized HK $293,054,500/ US $37,747,367, almost double the cumulative pre-estimates.

ON APRIL 9TH, CHRISTIE’S ANNOUNCED its latest foray into the Chinese market with a new license to hold auctions in China. Christie’s Shanghai follows in footsteps of Sotheby’s joint venture with Gehua last fall. The difference is Christie’s Shanghai has more leeway by establishing a subsidiary under its own brand name.

THE 9TH EDITION OF SP-ARTE gathered 122 participant galleries (81 Brazilian and 41 international), April 3–7. The São Paulo-based fair reached record numbers this year with 22,500 visitors.

THE 10TH EDITION OF ZONA MACO transpired April 10–14 in Mexico City. This year the fair gathered 110 galleries.

THE 5TH EDITION OF DALLAS ART FAIR ran April 12–14. The fair showcased 80 galleries dealing in Modern and Contemporary art and featured the gallery collective “Seven” (Bravin Lee, Pierogi, PPOW, Ronald Feldman Fine Arts, Catherine Clark and Inman Gallery).

CHRISTIE’S AMSTERDAM HELD a Post-war and Contemporary auction that yielded €4.6 Million/ $6 Million USD, April 16. In total, 81% by lot and 91 % by value. The top lot by Asger Jorn sold for €361,500/ $474,613.

THE 31ST EDITION OF ART BRUSSELS sponsored by ING, ran April 18–21. The fair presented 187 galleries displaying the works of 2000+ artists and clocked 30,432 visitors.

DUBBED THE WORLD’S OLDEST FAIR, the 47th Art Cologne ran April 19–22. Also known as “Internationaler Kunstmarkt”, the fair partnered with NADA designating a section for young galleries and their emerging artists. Overall, 200 prestigious galleries from 25 countries helped revive the fair.

CHRISTIE’S DUBAI STAGED two sales in modern and contemporary Art, April 16 and 17. The two-part “Modern and Contemporary Arab, Iranian and Turkish Art” auction earned $6,384,750 (surpassing its cumulative $5.5 Million pre-estimate). Of 103, 93% sold (only two works failed to find buyers). New records were made for Farhad Moshiri, Chafic Abboud, Fateh Moudarres, Safwan Dahoul and Charles Hossein Zenderoudi. The top lot was Moshiri’s “The Secret Garden.” The painting drew competition from 9 bidders (2 in the room and 7 on the telephone), eventually achieving $987,750.

ON APRIL 22ND, SOTHEBY’S contemporary auction in Doha, Qatar totaled $15,199,750, surpassing its $11.1–$16.1M pre-estimate; 89.1% of the lots were sold, topped by an untitled work by Donald Judd for $3.5M. This is the highest price realized at auction for Contemporary Art in the Middle East region. Records were set for artists: Julie Mehretu, Chant Avedissian, Mohammed Ehsai, Manal Al Dowayan, Ayman Baalbaki and Mahmoud Said.

ARTTACTIC PROVIDED the following summary: “The total sales achieved by both auction houses were $10,006,400, against an estimate of $8,045,000 - $11,806,000. This result almost doubled the sales volume of last year’s spring auctions and could signal a renewed interest and confidence in the market.”

SKATE’S RECENTLY RELEASED a report on the Polish market based solely on auction results. Contemporary art (as opposed to other categories like Old Masters), increased from 0.5% in 2005 to 43% in 2012 by the number of lots sold. “The first half of 2012 saw the best performance in the history of Polish auction houses. During that period auction sales produced PLN 30.1 million (USD 9.5 million), gaining 90% in comparison with the same period the previous year. Other market indicators also showed strength, especially the number of lots sold, which grew by 22.5% over the previous year… After two great quarters, sales in July, August and September exceeded the results of 2011 by more than 30%. The number of sold lots increased even more by than 65%. 2012 brought a total volume of PLN 60.5 million (USD 19.2 million), representing a 25% increase compared to the previous year.”

DELOITTE ALSO RELEASED research on the Polish market, confirming many of Skate’s findings. According to thenews.pl, “Consultancy firm Deloitte has estimated that the Polish art market is now worth between 300 million and 350 million zloty (72.8 million euro to 85 million euro).” Furthermore, the online news source quoted Deloitte partner Adam Mariuk: “The annual rate of return on investment in this market [for objects] held for more than 15 years is 46.6 percent, whereas investments lasting from one to five years yielded only 0.2 percent per year.”

ACCORDING TO ART MEDIA AGENCY, Weng Fine Art AG (WFA) “is expanding its financial base and enlarging its credit arrangements with more than €15m. Combined with its own funds, this will generate a purchasing budget of over €20 million.” Since 2012, WFA has experienced exponential growth (307%) by enlisting itself on the Frankfurt Stock Exchange as well as an electronic securities trading system, Xetra. Furthermore, Weng has specialized in art dealing for over 18 years—thus their expertise was established before going public.
AMA also reported: “Weng Fine Art AG’s majority shareholder Rüdiger K. Weng has recently signed a contract blocking up the sale of his 1.65m shares until 31 January 2016. The contract also stipulates that 60% of WFA’s capital cannot be sold either on or off-exchange for another three years. This long-running block-up shows, according to the press release, the investor’s confidence regarding the future of the company.”

MEI MOSES PUBLISHED its year-end 2012 results this April. The firm found art indexes underperformed compared to other indexes like S&P 500 and FTAS. The art indexes saw a 3.28% decline “question[ing] the continued recovery of the world wide auction art market.” Art Market Monitor added, “Mei Moses have found that although the average price of sales tracked was $518,910, ‘the median price was only $63,718.’ And that ‘Sales for less than $50,000 provided mean returns of 7.48% with a standard deviation of 17.23%.’ While ‘Sales between $500,000 and $1 million, in contrast, generated returns of 5.51% with a standard deviation of 10.93%.’ In other words, buyers took on greater risk to goose their returns from 5.5% to 7.5% which is hardly head-turning even in a low-interest-rate environment. Worse for art investors, reaching for return often backfired when works failed to sell.” The lesson is: buy art for pleasure not for financial investment alone.