News Column

Art of the matter

June 30, 2014

Is there any defined trend sweeping the Middle East art market and what are the drivers?

The growing number of museums, art fairs, galleries, art funds and 'advisors' indicates a growing regional interest in art. Established institutions such as The Fine Art Fund London took up its headquarters in Dubai. Its chief executive Philip Hoffman said the fund saw the MENASA [Middle East, North Africa, South Asia] region as one of the next areas of great growth in the art market, and one that is easily accessible to other growing markets in Asia. From the regional art scene we have specifically seen a high global demand for female artists and more politically-motivated types of art forms, together with work that is evocative of place, landscape and culture.

Is the Middle East art market influenced by global trends in prices and economic forces, or does it have its own niche?

All art is swayed by global trends in prices and economic forces. However through our own investigations into the Middle East market, we may be uncovering a niche of potential investors who aim to control their own personal collections regardless of the cost. As with much of the global art market trends, a large part of the art market boom is due to the growth of global wealth…many of whom have founded private museums and art spaces. We don't doubt those sorts of trends are capable of taking root here.

Are there enough consultancy services available to help an individual determine if a piece of art is a good investment?

Commonly-recognised art market indices are a good indication of the value of an investment. An investor should take heed of the artist's background, the quality and condition of the work, how in demand they are, who owned the piece previously, etc. In emerging markets where there is growing investment interest and lots of young artists who are relatively unknown, potential investors would benefit from more independent consulting services, independent curators and retail platforms such as galleries, auction houses and curated exhibits or fairs.

How can something as subjective as art be valued?

A global art market cultivates value based on common indices such as artists' training, subject matter, gallery representation and links to historical and cultural heritage. Other factors, such as the condition of the piece and provenance, play a large role in market value. But ultimately the price of each work comes down to what an investor is willing to pay for it.

Is art as safe an investment as gold?

Both are subject to market demand. The obvious difference is that gold is a regulated commodity that is easily graphed and trades on an official global market index. By contrast, no two works of art are the same (even from the same artist) and each piece has a perceived value based on what an investor or institution is willing to pay for it. Securing the market today are auction houses and art dealers who work as guarantors; buying art for themselves or through unidentified third parties before re-selling, thus driving up demand. A recent article by Georgina Adam in the Financial Times (FT), entitled 'How long can the art market boom last?' shows how speculators invest in works by young artists, buying massively into a first show, then putting the art into auction for sometimes high returns.

How has the perception of art changed since the financial crisis?

Unlike all other asset classes, art continued to rise in value during the crisis. According to the FT's Georgina Adam the contemporary art market has been growing steadily since 2004, with barely a flinch during the 2008-9 global crisis. She points out that it continues to grow, galvanised by new players from giant art fairs to massively rich new collectors and emerging economies, as well as the changing roles of auction houses and galleries. As a result the perception of art as an attractive alternative has encouraged new buyers from emerging economies such as China, Russia, Qatar and UAE to join in.

How has regional conflict impacted art and its valuation?

Conflict can damage an artist's means of producing work if geographical constraints exist, or increase their power to produce work to good effect; both factors including rarity and impact of the work (as we are witnessing) serve to increase market value.

What are the challenges facing the art investment market?

Encouraging more potential investors to invest in a wider audience of contemporary art and design, and to do so with confidence. Potential clients often feel they don't know enough to take the first step - therefore the market needs to cultivate and build relationships for them.

Rawia Beyhum is founder/director of TalentFreeFlow Ltd, a Bahrain-headquartered communication and talent agency.

For more stories covering arts and entertainment, please see HispanicBusiness' Arts & Entertainment Channel

Source: Gulf, The (Bahrain)

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