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The world's top auction houses are opening new headquarters and exhibition space in Hong Kong and announcing beefed-up sales schedules, turning to the ultra-rich to buck China's economic slowdown and boost sales in Asia.
Christie's, the 250-year-old auction house, is moving its regional headquarters to a 50,000-square-foot space in Hong Kong's new Henderson high-rise in September. The company hopes to increase the volume of goods it sells in Asia by holding auctions there throughout the year.
Rival Sotheby's opened a new store in Hong Kong's central business district in July and has moved into new offices in the city. Bonhams, one of the world's leading auction houses, is due to open its new Hong Kong headquarters in September, and Phillips moved into a new premises last year.
The moves come despite a slowdown in the global art market, a sharp decline in luxury goods spending in China, and a worsening growth outlook for the country.
Art sales at Hong Kong's most prestigious auction evening sales fell 40% in the first half of this year from a year earlier, to the lowest level since 2017, according to research group ArtTactic.
China's economy barely managed to grow a weaker-than-expected 4.7 percent in the second quarter of this year but is suffering from a persistent slowdown in consumption, which some analysts have warned will have an impact on the art and luxury goods industries.
Francis Belin, Christie's president for Asia, disagrees: “While we don't have large luxury sales in China (overall), I don't think our totals are reflective of the macro,” he said, adding that the region's clients (80% of whom are from mainland China, Taiwan and Hong Kong) are focused on ultra-luxury goods and are little affected by the economic slowdown.
“You can't just have money to buy the products we sell. You need a lot of money. Funds are very scarce.”
Christie's will move its regional headquarters to Hong Kong's new Henderson Building in September © Isaac Lawrence/AFP/Getty Images
Asian buyers accounted for 41% of the company's luxury sales in the first half of the year.
He argued that rare items sold at auction houses are likely to exhibit “no correlation” with negative macroeconomic events.
“Consumption is weakening in China, (but) are scarce commodities the way to store money, rather than real estate, bonds or stocks? I think so.”
Still, Asian buyers' share of Christie's total auction sales fell to 21% in the first half of this year, from 39% in mid-2021, when the company announced plans to move to the new venue.
The company's recent sale of 21st-century art in Hong Kong fell short of low expectations, but sales of 20th-century art were broadly in line with expectations.
Sotheby's new two-storey space in Hong Kong's Central district combines exhibition and performance space with a retail store and coffee shop © Isaac Lawrence/AFP/Getty Images
But Mr Bellin said only about half of spending by Asian clients at Christie's typically occurs in Hong Kong, meaning there is still untapped demand to drive more sales there.
“We have always found that Asian collectors are more active overseas than they are in Hong Kong,” he said.
Rival auction group Sotheby's, which has also struggled in recent months with sluggish global auction sales and staff cuts, launched a foray into Asian retail last month. Its two-storey “Maison” in a shopping mall in Hong Kong's Central district will sell rare books, paintings and sculptures ranging from HK$5,000 (US$640) to HK$50 million.
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“In terms of the outlook for the Chinese ultra-wealthy, we are still seeing very high ticket prices from Chinese collectors at the top end of the market,” Nathan Drahi, managing director of Sotheby's Asia, said at the opening, adding that more than a third of buyers at the firm's recent New York auctions came from Asia. “We believe in the long-term prospects for that market.”
But Meg Maggio, a Hong Kong-based art advisor and global managing director of Pearl Lam Gallery, said that while she believes there is underlying strength in the art and luxury sectors, the expansion comes at a “precarious” time for the market, given growing geopolitical uncertainty and “intense” competition.
“The question is whether there is too much auction and auction house activity in Hong Kong. I wonder if the market will become saturated,” she asked.
