The move is seen as part of Ukraine's efforts to reinforce its army as soldiers struggle to hold positions against Russia
The market value of global art decreased significantly in 2020 over the previous year due to the impact of the Covid-19 pandemic. Art and antique sales value worldwide dropped from over $64 billion in 2019 to a little over $50 billion in 2020, a whopping 22 per cent decline, states The Art Market 2021 report published recently by Art Basel and UBS. The steep drop is because of the cancelled auctions and in-person events.
However, on a positive note the art market’s share of online commerce in 2020 exceeded that of general retail with art market sellers doing fully one-quarter of their business online at $12.4 billion (outstripping the 18 per cent share for retail generally). That number is up from just 9 per cent in 2019. If we compare this with previous year, online sales figures for art had taken the previous six years to double.
The United States was the leading country in the global art market in 2020, generating 42 per cent of the global art market value. This is followed by China and the UK. The two countries generate 20 per cent of market value in global art, as per the report.
Art in the UAE
The UAE, or for that matter, the Middle East on the whole, doesn’t feature in the report, suggesting the relatively small market for art in the region. The art industry in the UAE is in its nascent stage and according to some industry experts, it should be between $20 million to $30 million.
“Art has definitely come to the forefront in the last few years with growing interest from some big auction houses and private investors. And now with the launch of 'Creative Economy' by His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai, which seems to be placing an emphasis on all creative related aspects, the art space could get a boost. The launch of the ArtBank is also a sign of the direction in which we are heading,” says Shan Fazelbhoy, Founder, Kobo Art in Dubai.
Kobo Art has been around for over nine years and features work of both the UAE and international artists. However, the sales are mainly driven by the UAE based artists.
The art landscape in Dubai is changing fast and the emirate is being looked at by international artists too to market their work. Sacha Jafri, a British artist, for instance, recently completed the world’s biggest canvas painting, The Journey of Humanity, in Dubai and also sold it in Dubai at a private auction.
“I was planning to cut in 70 pieces and auction it in six countries over nine months, but I didn’t have to. Andre Abdoune, chief executive of Altius Gestion International Holding, bought it in entirety for Dh227.75 million. It could happen only in Dubai,” Jafri had told Khaleej Times soon after the auction in March.
Safekeeping of art
Art is a rare commodity and an asset class that falls in the luxury category. “Like any other asset, loss, theft or damage can impair the value of the asset partially or totally. The investors usually insure the artwork and thereby transfer the risk to insurers,” said Ushat Gulgule, Owner of Art Conexion.
“Art is insured by an individual piece or as a complete set or lot. The cost of managing an art collection depends on the size of the art collection, location and the risks undertaken. In terms of insurance costs, the premium is based on the type of art, storage or display conditions, security and maintenance protocol and movement of artwork, if any. More the risk undertaken higher is the premium charged. Usually, this ranges from a minimum of 0.7 per cent to 1.5 per cent of the artwork insured,” added Gulgule.
Table:
>> $50.06 billion - Market value of global art
>> 31.4 million – Volume of art transactions worldwide
Distribution of the global art market in 2020, by country
>> United States: 42%
>> United Kingdom: 20%
>> China: 20%
>> France: 6%
>> Switzerland: 2%
>> Germany: 2%
>> Spain: 1%
>> Rest of the world: 7%
Source: Art Economics
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