Features

Art - A Bid for Power

28 Jun 2010

Despite the financial crisis which started in 2008 and the recent jitters of the stock markets worldwide caused by serious monetary problems in Europe, the art and wine markets have enjoyed surprising success in Asia with several world records set at the May auctions in Hongkong.  

It is easy to see why Hongkong has become the undisputed centre for auctions in Asia. Even before the financial crisis hit in October 2008, auction houses around the world had been tapping Asia, especially the China market, for growth. They were right on the money. The Asian market has proved to be resilient, with Asian chequebooks propping up the auction business throughout the economic downturn.

rare rhyton-form “dragon” rhinoceros horn libation cup from the 17th to 18th century

Photo: rare rhyton-form “dragon” rhinoceros horn libation cup from the 17th to 18th century

In fact, business is more robust than ever and that is especially thanks to China, where increasing interest in auctions and wealthy buyers are a major source of growth for auction houses.

Mainland Chinese buyers dominated the Chinese arts and antiques sales, as well as the wine sales to a large extent. They snapped up most of the big-ticket lots at the various auctions and their numbers are increasing continuously and rapidly.

“Hongkong is the window to the outside world for Chinese collectors and they look to Hongkong for direction and guidance on what to collect. They are a new force to reckon with, establishing themselves as strong pillars of the art and wine markets. They are also more actively re-acquainting themselves with their historical and cultural identity and are keen to bring back some of the country’s prized possessions,” says Carson Chan, managing director of Bonhams Asia.

Bonhams’ Asia auction

“With greater wealth generated from decades of strong economic growth, Chinese art collectors are now more active in the global art market, travelling to New York and London after Hongkong to snap up cherished traditional Chinese works of art and antiques. Some are expanding their collections to include important Western impressionist art,” he says.  

The rising strength of the mainland Chinese and Asian markets has propelled Hongkong into the world’s third largest art-auction hub after New York and London. This lofty status has been achieved in part through the increased presence of auction houses here since 2007. During the two previous decades, the auction scene was dominated by market leaders Christie’s and Sotheby’s. Bonhams, the privately owned British auction house and one of the world’s oldest and largest auctioneers of fine art and antiques, opened a regional office here in 2007. Seoul Auction, Est-Ouest Auctions and Acker Asia followed it in quick succession. Such a proliferation of auction houses within such a short time shows Hongkong’s growing attraction as an auction hub.

Notwithstanding the market potential, setting up an auction house here is relatively easy. “Hongkong has a very simple and well-structured tax system. Our legal system is also well developed and compatible with those in the east and west, making Hongkong a suitable location for international auction houses to expand here. As opposed to cities such as New York and London, there is no need to apply for an auction licence in Hongkong, making it rather simple to establish an auction business here,” Chan says.

“The icing on the cake is our geographical location. Our proximity to mainland China and the rest of Asia, where the market is growing, makes Hongkong an obvious choice to plant a flag.”

The new kids on the auction block are a boon to the legion of Asian collectors, from beginners to connoisseurs. They offer a wider range of collectibles and democratise the auction business with their reach to a much larger audience. Today auctions are no longer regarded as the prerogative of a small elite, but are accessible to the general public.

superlot of 360 bottles (1978-2007) from the Château Margaux Private Cellar

Photo: superlot of 360 bottles (1978-2007) from the Château Margaux Private Cellar

Traditionally, auction categories in Hongkong were limited to Chinese antiquities, paintings, Asian contemporary art, jewellery and watches. The new auction houses injected fresh ideas and impetus into the auction market. Bonhams was first off the block by holding a wine auction with sterling results in April 2008, immediately after the local government abolished the duty on wine. It was the first wine auction held in Hongkong after a hiatus of 10 years.

Bonhams also set up a wine-education scholarship in 2008 in Hongkong to help nurture budding wine-industry professionals and support the government’s initiative of turning Hongkong into the wine hub of Asia. 

superlot of 96 bottles of 1988-1999 Henri Jayer Vosne Romanée Cros Parantoux

Photo: superlot of 96 bottles of 1988-1999 Henri Jayer Vosne Romanée Cros Parantoux

In November 2009, the auction house set another precedent by holding Hongkong’s first whisky auction. The prized single-malt whiskies came from the world famous Williard S Folsom Collection – an impressive, single-owner collection of over 3,000 bottles. This is also the largest and most varied collection ever to appear at an auction. Such was the rarity and attraction of this sale that collectors were willing to pay the 100 percent duty on spirits to the Hongkong government to secure their favourite vintages, resulting in the lots being sold out.

In addition to wines, Bonhams also held auctions of Chinese ceramics and works of art, Chinese paintings and contemporary Asian art, jewellery and watches.

On May 28 this year, its sale of 140 exquisite Chinese snuff bottles from the Mary and George Bloch Collection, the best collection of its kind in the world in private hands, set multiple world record prices. The collection sold out and raised over HK$66 million (US$8.5 million) against a pre-sale estimate of HK$20 million (US$2.8 million). The top lot, a 4.22cm-high Imperial enamelled snuff bottle from the Qianlong period, sold for a world record price of HK$9.3 million (US$1.2 million), three times its pre-sale estimate. 

snuff bottle from the Qianlong period

In another break from tradition and in response to a growing interest in Western art among Asian collectors, Seoul Auction offers Western contemporary art for the first time in Hongkong.

“We introduced new categories and new artists to the Hong Kong art scene by offering a carefully curated selection of Western and Asian art works that are fresh to the market and with reasonable estimates,” says Misung Shim, managing director of Seoul Auction Hong Kong. 

“The Asian section includes Chinese, Korean, Japanese and Indonesian works.”

Seoul Auction played a pioneering role when they offered significant Western masterpieces as well as Asian art. For example, iconic works from Damien Hirst fetched strong prices and set records for the most expensive works by Damien Hirst ever sold in Asia. In the May 2009 sale, Tranquillity by Damien Hirst from his highly acclaimed “Butterfly” series, sold for HK$13.37 million (US$1.71 million). The Importance of Elsewhere The Kingdom of Heaven, also from his celebrated Butterfly series, achieved HK$17.22 million (US$2.23 million) in their October 2009 sale. At that time, both pieces established a record as the most expensive works by Damien Hirst ever sold at an auction in Asia. 

Following the success of the Hirst art works, Seoul Auction went on to introduce works by other renowned Western artists, such as Donald Judd, Robert Indiana and Ron Arad, fetching two new world auction records at its Spring Sale in April 2010. It also opened a new era in the Asian art auction market by introducing the exciting new category of contemporary design with the sale of Ron Arad’s Bio-Void 1, a fluid and sensuous sculpture made of painted aluminium which sold for HK$932,000 (US$120,413).

Catering to another market niche is Est-Ouest Auctions of Japan, the oldest Asian auction house established in 1984. Its Hongkong office opened in November 2008, but their path to Hongkong took a different turn from the norm.

The auction house was approached by the Art Charity China International Exhibition to host art exhibitions in Beijing and Tokyo in 2008, culminating in two auctions in Hongkong in November 2008, with the proceeds of one going to the charity.

Est-Ouest has long been recognised in Japan for its strength in western decorative arts, and contemporary and fine arts. In 1984, it launched with simultaneous auctions of French Daum glass objet d’art in Paris and Tokyo and has gone from strength to strength since then.

“Some of our consigned lots come with a certificate issued by the Western Art Merchant Association of Japan, the only organisation in Asia authorised to issue such certification. This certificate verifies the authenticity of the object and adds to our credibility,” says Chenny Zhou, vice-president of Est-Ouest Auctions in Hongkong.

“We offer exquisite Art-Nouveau and Art-Deco glassware from some of the most prestigious names such as Daum, Lalique, Galle, Legras, Tiffany, Theresienthal and Ludwig Moser & Söhne, as well as sculptures in marble and bronze. Our contemporary and fine arts sales feature renowned Japanese, Chinese and Western artists, with the star lot of our Spring Sale in May being Pablo Picasso’s Femme Couchée, an oil on canvas painted in 1960 fetching HK$21.8 million (US$2.8 million). We also had works by Auguste Renoir, Henri de Toulouse-Lautrec and Marc Chagall, to name but a few.” 

Yayoi Kusama’s Pumpkin

Photo: Yayoi Kusama’s Pumpkin

 

Pablo Picasso’s Femme Couchée

Photo: Pablo Picasso’s Femme Couchée

High-end jewellery and luxury watches are also part of Est-Ouest sales, with the addition of fine and rare wines from the exceptional cellars of a French and a Japanese collector in May.

173.2 carats brilliant-cut diamond necklace

Photo: 173.2 carats brilliant-cut diamond necklace

On the subject of liquid gold, the one new auction house in Asia that has taken wine auctions to stratospheric heights is Acker Asia, a branch of American wine merchant auctioneer Acker Merrall & Condit.

“We’ve held nine incredibly successful sales since May 2008, with the most recent sale, a single legendary cellar, The Imperial Cellar collection owned by entrepreneur Eric Greenberg, auctioned off on May 28 and 29. The wines represented in these sales are of sound provenance and in high demand, “blue chip” or investment grade wines. The most sought-after wines mostly come from top Bordeaux chateaux and Burgundy producers with long-standing track records, but there are wines across the board from Champagne, Rhone, Italy, California, and Spain among the ranks as well,” says John Kapon, president and auction director of Acker Merrall & Condit.

The 19,000 plus bottles from The Imperial Cellar auction achieved a record total of more than HK$152 million (US$19.52 million), making it the largest wine auction ever held in Asia and the second-biggest wine auction of all times worldwide. World auction records were set for the top lot of 96 bottles of 1988-1999 Henri Jayer Vosne Romanée Cros Parantoux which realised HK$1.95 million (US$250,000). Spirited bidding resulted in new world records of HK$1.46 million (US$190,000) for a super-lot of 360 bottles (1978-2007) of Château Margaux Private Cellar, and two 12-bottle lots of 1996 DRC Montrachet, with each lot hammered at HK$1.17 million (US$150,000).

Fine wine auctions have taken Hongkong by storm since Bonhams’ inaugural one in April 2008, with leading auction houses such as Christie’s and Sotheby’s, American wine auctioneer Zachys and most recently Est-Ouest Auctions jumping on the bandwagon.

Acker Asia has set itself apart from its rivals not just by conducting the most wine auctions in Hongkong to date, but in numerous other ways. It is the auction house originally responsible for the “zero percentage seller’s commission”. Ron Kapon, who operates his family business Acker, Merrall & Condit, also paved the way for the inclusion of all the world’s great wines in the auctions and not just Bordeaux. It offers live and internet auctions to reach a broader market.

Kapon also writes Vintage Tastings, an ongoing narrative of his outstanding experiences with wine from all over the globe which he shares with his clients. He brings a bit of fun to the Acker sales through special events and one-of-a kind tastings in collaboration with top wineries such as Chateau Margaux, Chateau Angelus, Dom Perignon, Caymus and Massetto to bring consignments directly from the chateaux. 

Business has been better than expected, with Hongkong revenues contributing 50 percent to the overall global Acker business in 2009. They estimate this will increase to 75 percent in 2010. This is one reason why Hongkong has overtaken London to become the number two wine auction hub in the world and is set to take over the number one position from New York possibly this year.

Such a range of new auction houses and collectibles on offer in Hongkong means not just healthy business, but a plethora or choice for collectors, whether for appreciation or consumption. With the exception of Acker Asia, which plans to hold six auctions this year, Bonhams, Est-Ouest Auctions and Seoul Auction all hold biannual sales, with the former two in May and November and the latter in April and October.

Prior to their Hongkong sales, they hold exhibitions in other Asian cities, such as Singapore, Beijing, Taipei and Tokyo as well, so collectors can preview the objects of their desire and learn more from the specialists. From a novice to an expert, this is a good educational opportunity to strengthen knowledge and to learn how to start or build up collections. Auction house specialists are more than happy to offer unbiased advice and guidance based on the collector’s preference, passion and budget. 

Now is certainly a good time to be a collector in Asia. Whether one ends up making a successful bid or just wants to observe, doing the rounds at the sales of new auction houses in Hongkong is an educational and thrilling experience. An almost dizzying selection of collectibles is on offer at an equally wide price range. One could pick up a bottle of fine wine for HK$4,000 (US$514) or a renowned painting for tens of millions. The choice is vast, and it depends on how hot your passion runs and how deep your wallet is when the gavel comes down on the winning bid.

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