– Auction houses look to Hong Kong to beat gloom
Three of the world’s biggest auction houses are competing for ambition in Hong Kong, with plans to expand to attract younger buyers from Asia despite a decline in global art sales since the pandemic.
Published: 29.07.2024, 02:44
Auction houses are banking on the potential of young Asian buyers to convert Hong Kong into an Asian art market hub.
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Sotheby’s, Christie’s and Bonhams are unveiling new regional headquarters in August and September, the culmination of years of efforts to strengthen their presence on the island, a former British colony that is now a special administrative region of China.
Sotheby’s opened new showrooms in a swanky shopping mall in Hong Kong’s financial district on Thursday, in a two-storey space previously occupied by luxury clothing brand Giorgio Armani. “We want this state-of-the-art space in Hong Kong to be the epicentre of culture for visitors from around the world,” Nathan Drahi, the auction house’s managing director for Asia, said at the opening. “We are very confident in Hong Kong’s prospects because (the island) has strong fundamentals for our sector,” he told AFP, including a favourable tax environment.
Not far from there, Christie’s will inaugurate its premises in September in a new skyscraper designed by Zaha Hadid’s architectural firm, with a total surface area doubled to 4,600 m2. “Asia has been the pillar of the company,” notes Francis Belin, president of Christie’s Asia-Pacific. “But we did not have the physical tool, the infrastructure (…) to live up to our ambitions.”
Art consultant Patti Wong says companies are “betting on Hong Kong being the centre of Asia” for art, but not without risk. Hong Kong’s biggest auctions of the year are held every spring and autumn at an exhibition centre, over four intense months that draw visitors. With the new dedicated venues, the events will be more spread out. “This will be a big test for Hong Kong as to whether we can become a more mature auction market with visitors all year round,” Wong says.
These auction houses are not worried about political changes in Hong Kong, even if Beijing’s takeover of the city is curbing artistic freedoms, says Patrick Mok, a cultural policy specialist. “The companies that operate on the Hong Kong art market are rather apolitical (…) they know that these (political) works cannot achieve good prices here,” he observes.
“Ideal base”
Global art sales have slowed since Christie’s and Sotheby’s unveiled plans to expand into Hong Kong during the heady months of 2021 and 2022. In the first six months of 2024, Christie’s reported sales of $2.1 billion, down from a peak of $4.1 billion in the first half of 2022.
Wendy Goldsmith, a London-based art consultant and former Christie’s auctioneer, said the Chinese property crisis was a major factor in the slowdown. “Asian collectors are currently catching their breath, but the interest and desire to collect is still there,” she told AFP. “The auction houses know they will come back … and probably stronger than ever.”
Bonhams, which will move into a new 1,700-square-metre space in September, says it targets transactions under HK$10 million (US$1.3 million). “This segment has proven resilient despite the broader economic uncertainties and represents a huge opportunity in Asia,” said Julia Hu, Bonhams’ managing director for Asia. Hong Kong remains “an ideal base to enter other major Asian cities,” Hu said, given its strategic location, efficient logistics, collector base and tax and legal frameworks.
Attracting young buyers
Auction houses are now racing to attract younger buyers and are embracing online auctions, a shift accelerated by the Covid-19 pandemic. At Christie’s, 29% of buyers in the first half of the year were millennials or Generation Z. “Auction houses have become marketing machines,” Goldsmith says, with some sales staged in a Hollywood-style setting.
The challenge for these houses will be to attract buyers familiar with online sales to their premises. But for Julia Hu of Bonhams, traditional auctions are irreplaceable. “Our clients still want to feel the thrill and excitement of being there physically.”
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AFP
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