Middle Eastern art market takes off

Middle Eastern art market takes off

Michael Jeha of Christie's Dubai: 'Stable investment over time'

09 August 2011

MIDDLE Eastern art investment has become a popular channel for prudent private and corporate investors to hedge against fluctuations in conventional financial markets, particularly amid the ongoing economic turmoil.

Fine art objects are tangible assets and can be traded as currency, at auction or, increasingly, online. The financial benefits of investing in art are security of owning a physical asset and the potential for growth in value, coupled with the status and enjoyment of owning a fantastic piece of art.

Buying fine art is a way of diversifying an investment portfolio, allowing you to either build a collection of disparate individual pieces or focus on a group of artists with similar mediums and themes.

But what should you know before taking the plunge into the world of art investment? cashy takes a look...

Experts' advice

Experts advise investors to firstly understand that art investment requires a long-term view – of at least seven to ten years. Of course, you could sell sooner if market conditions are favourable.

Michael Jeha, managing director Christie’s Dubai, says: “It’s important to remember that Middle Eastern art interest has grown and developed from a solid base and, therefore, offers a stable investment over time.”

Secondly, research the popularity, interest and resale value at auction of classic and trendy artists. Thirdly, take advice from specialists at art galleries and auction houses on reputable sourcing, purchase price and resale potential.

Most auction houses will give free valuations, but take into account the high costs involved in selling on a work of art, including auctioneer handling fees and commission.

Lastly, choose artists, time-periods or styles that most appeal to you as an individual investor: you want to enjoy the artwork for its own sake for as long as possible.

Market grows

When Christie’s held its inaugural auction of Middle Eastern art in Dubai in May 2006, it boosted collectors’ interest by creating a new international platform for art purchase from the region. Jeha says that sales are currently split between international and Middle Eastern collectors.

Private and public galleries and international auction houses in the region are making great strides in representing contemporary artists. Some have shown large installation pieces and sculptures, the quality of which is on a par with works exhibited on the world’s biggest international art markets.

Over the past five years, Christie’s Dubai has held twice-yearly auctions of modern and contemporary Arab, Iranian and Turkish art, jewels and watches, achieving sales of over $200 million. Global buying activity among Middle Eastern clients has increase by over 400% during that period.

What’s hot?

In April this year, Christie’s Dubai put works by Paul Guiragossian, Fateh Moudarres, Farhad Moshiri and Mohammed Ehsai under the hammer. It also sold works by the Saudi Arabian group Edge of Arabia, with Abdulnasser Gharem’s ‘Messenger’, estimated to sell for $70,000 to $100,000, going for a mammoth $842,500.

Mona Hauser, owner XVA gallery in Dubai, says that those starting out as art investors should look to great corporate art collections and art funds that are paving the way for nurturing the Middle East arts environment, such as those owned by Credit Suisse, Abraaj and Sovereign.

There are also strong private collections that go on show in public spaces, at times, such as the Farjam Collection, one of the finest privately-owned Islamic art collections in the world. Thousands of objects from the collection appeared for the first time in Dubai this summer, with the exhibition spanning almost the entire history of Islam and including some of the rarest artistic masterpieces of the Islamic world.

Other private collections to follow include the Barjeel, Farook and Salsali Collections. Hauser says: “These collectors are sophisticated and savvy about their collecting decisions; it is worth looking into what they buy to learn about trends in the market for contemporary Middle Eastern art.

“All collect a diversity of artists’ work. Investors should look towards adding Middle Eastern art to their portfolio as the market’s reputation is continuously getting stronger, gaining attention and credibility.”

Photography has also attracted a lot of attention recently in the Middle Eastern market and it is becoming increasingly popular. Hauser adds: “XVA represents a number of talented photographers; one very popular practitioner is Halim Al Karim, who along with other artists is pushing the boundaries of contemporary Middle Eastern art.”

What are your views on investing in Arabic art? Share with cashy below...

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