This business of art beckons
Middle Eastern art auctions, such as this one at the Royal Mirage hotel in Dubai last Saturday, have begun to produce notably large sales. Pawan Singh / The National
The ballroom in the Royal Mirage resort is full of people and canvases.
Hanging on walls in the heart of this Dubai hotel are about 80 pieces of art from the Middle East and South Asia that have come out for auction, and they have caught the attention of an equal number of prospective buyers. The seemingly well-heeled and unquestionably elegant crowd of Emiratis, Western expatriates and South Asian collectors pause, nod appreciatively at each work and discuss the pre-auction estimates.
“That’s a real bargain,” says Mehreen Rizvi, the head of South Asian and Middle East art for Bonhams, the 216-year-old auction house behind the sale. According to Ms Rizvi, the Souza painting would have likely fetched more than $150,000 several years ago, before the recession. But even in the current economic climate she is confident that a buyer would in time profit from its purchase.
International auction houses such as Bonhams, Christie’s and Sotheby’s have been enthusiastic about the revival of the art market despite the economic downturn, which resulted in prices in some schools – such as contemporary art – taking a beating after years of uninterrupted growth. Though Christie’s sale of jewels, watches and international modern and contemporary art last April in Dubai ended up bringing in $4.7m, a far cry from its $20m intake in 2008, the auction house hailed the sale as a positive surprise for the developing Middle East market.
“There was a lot of uncertainty at the time, as it was a new market and no one knew how it was going to be affected,” says William Lawrie, the head of sales at Christie’s Dubai for international modern and contemporary art.
Back at the Royal Mirage, the action gets under way when Mathew Girling, the chief executive of Bonhams for the UK and Europe, picks up his hammer. The first seven lots are grabbed by telephone buyers, whose bids were energetically communicated to Mr Girling by the Bonhams specialists present in the room.
The Souza painting eventually sells, after one of the evening’s many energetic bidding wars, for $86,400. Mr Bagash, who has a collection of more than 1,000 paintings from South Asian, South East Asian and Middle Eastern artists, did, however, not place the winning bid.
By the end of the evening, 70 per cent of the lots were sold and Bonhams recorded sales of more than $1.8m, which Mr Girling says was comfortably in line with the house’s estimates.
“It’s an indication that confidence in the art market has returned,” Mr Bagash says. He added, however, that lower pre-auction estimates may have played a role in the evening’s success.
Since those heady days in 2007 and 2008, when auction houses regularly reported record-breaking sales, the art market has calmed down.
“This recession completely froze up the art sales nine months ago, right after Lehman,” says Mr Girling, referring to the implosion of the storied investment firm. For the likes of Bonhams, whose 2008 Dubai sale fetched about $13m – more than double the high estimate of $6m – the downturn was bad news, as there were no sellers and, consequently, no buyers. Sellers were not consigning their assets, because they knew that they would be unable to book any profit.
In recent months the scenario appears to have improved, as financial difficulties forced some collectors to part with their assets, including art.
However, the challenge for auction houses appears to be attracting what Mr Lawrie, of Christie’s, terms “standout pieces”, with the goal of sourcing art that will draw collectors into bidding contests.
The 45-year-old Mr Bagash, who is the managing director of Bagash Trading, a private company dealing in petroleum products and construction materials, is a regular presence at auctions and has sold a number of his paintings for a profit. Without revealing figures, he recalls selling a painting by Indian artist TV Santhosh “at a good price” in 2007 to purchase “two or three works by another artist at another auction”. The money was parked with the auction house managing both sales, allowing the collector to bid on a moment’s notice.
When asked about his philosophy when it comes to collecting and investing in the works of artists, Mr Bagash speaks with enthusiasm.
“A piece of art is of no use if it cannot enhance a collection – either aesthetically or as an investment,” he says, adding that he thinks we are witnessing a correction in the art market.
“Mediocrity is getting filtered out and prices are returning to realistic levels,” says Mr Bagash, who also has a license to run an art gallery in Dubai. “Business in the art market is bad, and what this market really needs is galleries to start bringing in more affordable art instead of focusing on the million-dirham paintings.”
“Artists take time to become great artists. The modern Indian masters like Souza selling at incredible prices took more than 50 years to enjoy this kind of success,” he says.