Three of the world’s top auction houses are scrambling to expand in Hong Kong, eager to attract new Asian buyers even as the global art market retreats from pandemic-era highs.
In the space of two months, Sotheby’s, Christie’s and Bonhams will see the culmination of years of efforts to upgrade their regional headquarters in the southern Chinese city.
Sotheby’s on Thursday unveiled showrooms at an upscale mall in Hong Kong’s financial district, a two-story space formerly occupied by fashion house Giorgio Armani.
“We envision this state-of-the-art space in Hong Kong to be the epicenter of culture for global visitors,” Asia CEO Nathan Drahi said at the opening.
“We are very confident about Hong Kong’s outlook because it has some strong fundamentals for our industry,” he told AFP, pointing to the favorable tax framework.
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Nearby, Christie’s is preparing for the September opening of a new skyscraper designed by Zaha Hadid Architects, doubling its total floor space to 50,000 square feet.
“Asia has been the backbone of the company,” said Francis Belin, president of Christie’s Asia Pacific.
“But we didn’t have the physical tool, the infrastructure … to really be at the level of our ambition.”
Companies are “hedging their bets and saying Hong Kong is the center of Asia,” according to art consultant Patti Wong — but she said expansions carry risk.
“Ideal Base”
Hong Kong’s biggest auctions of the year are held every spring and fall at the city’s convention and exhibition center — a busy four months that generate hype and attract visitors.
With new interiors, events will be more widespread.
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“This is a big test for Hong Kong and whether we can develop into a more mature auction market (with) visitors throughout the year,” Wong said.
Global art sales have slowed since Christie’s and Sotheby’s first announced plans to expand into Hong Kong in the heady days of 2021 and 2022.
This year, Christie’s reported sales of $2.1 billion in the first six months – the second consecutive year of decline – from a 2022 peak of $4.1 billion.
Wendy Goldsmith, a London-based art consultant and former Christie’s auctioneer, cited China’s property crisis as a major factor.
“(Asian collectors) are currently taking a bit of a breather in terms of buying, but the interest and appetite for collecting is still there,” Goldsmith told AFP.
“Auction houses know they will be back… and probably stronger than ever.”
Bonhams, which will move to a 19,000 sq ft site in a new office building in September, said it has found success targeting transactions below HK$10 million (US$1.3 million).
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“This segment has proven resilient despite wider economic uncertainties and represents a huge opportunity in Asia,” said Julia Hu, Bonhams managing director for Asia.
Hong Kong remained “an ideal base for leveraging other major Asian cities,” Hu added, citing its strategic location, efficient logistics, revenue base and tax and legal frameworks.
New buyers
New York-based Phillips, another auction house, opened its regional headquarters next to the Hong Kong Museum of Visual Culture in 2023.
Companies are unfazed by Hong Kong’s political environment, even as critics say Beijing’s crackdown has frozen artistic freedoms, cultural policy scholar Patrick Mok said.
“Companies operating in the Hong Kong art market are rather apolitical… they know that these (political) works cannot fetch good prices here,” Mok said.
Auction houses are now competing for younger buyers and embracing online bidding — a shift accelerated by the pandemic.
Christie’s said 29 percent of buyers in the first half of 2024 were millennials or Gen Z.
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“Auction houses made a penny during Covid … (They’re) marketing machines now,” Goldsmith said, adding that auctions have been enhanced to look like Hollywood productions.
“(They’re more than willing to offer these events, lectures, dinners, screenings … all to come up with the next offering.”
The opportunity — and challenge — of Hong Kong concert venues will be to bring indigenous online shoppers into the real world.
But Bonhams’ Hu was confident, saying showroom auctions are irreplaceable.
“Our customers still crave the sheer thrill and excitement of physical presence,” he said.
Source: AFP