Making Art Work

There’s money to be made from owning art, says Mr. Troy Sadler, Managing Director and Head of Investment at Art Works Singapore

Enter a refurbished shophouse at Nankin Row, China Square Central, and you will see several contemporary Chinese paintings lining the stark walls. This is Art Works, the first contemporary art investment gallery in Singapore to offer a full suite of end-to-end art investment services.

Mr. Tony Sadler, a former tennis professional and art investor for over a decade, manages the eight-year-old Singapore-based company. He started working as a gallery assistant in New York City before moving back to Sydney in 2000 where he joined Australia’s leading art brokerage and ultimately wound up running the trade floor. Since then, he developed his career in Hong Kong and Singapore, and specializes in Chinese contemporary art.

Art Works offers assurance and reliable information to potential investors who are keen to enter the art investment market. Mr. Sadler explains, “It’s all about education and trust. Art Works does due diligence thoroughly over a long period of time on each artist we represent. Therefore, we will educate the potential investor on the artists, the market and our buy-to-lease model.

“Once we have your trust, we’ll find you a piece that suits your investment needs. The common areas as with any investment are entry price, return potential, and exit timeframe and we will advise the most suitable piece for your needs.”

Art Works investors have overcome the concept that they are buying a piece of art, Mr. Sadler says. “They are investing into a tangible asset with a company that manages a buy-to-lease model. Investments are about ROI and capital appreciation, not pretty pictures,” says Mr. Sadler, himself an owner of several art pieces. “It’s however difficult not to be seduced by the beauty of a piece, especially when you have a personal relationship with the artists.”

Mr. Sadler reiterates that Art Works does comprehensive due diligence on all of the artists they represent and will only consider established artists of mid-career, with a rich history and credibility. This means they have long-term track record in the auction market, exposure in international exhibitions, representations in various markets like Europe and the US, plus a strong PR/image (third party endorsement), among other things. “As with any relationship, you have to understand the essence of an artist before you can fully appreciate and represent them. We spend many hours with our artists, attend their exhibitions and follow their auction sales closely before ever considering recommending them to our investment clients.”

“Art and artists establish the foundation of stability in our business model,” Mr. Sadler points out. “Art Works deals with mainly midcareer contemporary Chinese artists. The selection process of each artist can take upwards of 12 months while we meet with them in person, visit their studio and follow the trends at auction and exhibitions of their work.”

Still In ‘Infancy’ Stage

Art Works focuses on Chinese contemporary artists, a sector that has seen up to 10 per cent growth over the past 10 years. “We foresee huge growth within the sector as the world becomes more accustomed to Chinese contemporary art,” shares Mr. Sadler on

the type of art that investors should consider at the moment. “We understand that the Chinese art market has gone global, that’s why we specialize in Chinese contemporary art.”

According to the Art Market 2018 Report published by Art Basel and UBS, the global art market reached US$63.7 billion in 2017, a 12 per cent increase in sales. The top three markets are the US, China and the UK, accounting for 83 per cent of total sales by value. In Southeast Asia, growth opportunities appear to lie in the Art & Finance market. In 2016, sales in the Southeast Asian market grew 28 per cent.

Meanwhile, Chinese contemporary art has been around for well over a decade now, with major auction houses holdings sales in international markets. Although domestic demands outpace international sales, Chinese contemporary art market is wellregarded internationally. A 2009 Artprice.com report noted that “in 2002, there was only one Chinese artist in the global TOP 100 (ranked by auction revenue); today there are 34 – compared with just 20 American artists”.

A 2013 SCMP report reiterated that “by the mid-2000s, contemporary works by Chinese artists were breaking auction sales records,” citing works by Yue Minjun, together with (cynical realists) Fang Lijun and Liu Wei, and (pop-political artists) Wang Guangyi, Yo Youhan and Li Shan heralding “a new global dominance by Chinese art”.

Mr. Sadler clarifies that although the Chinese contemporary art market has seen a steady growth over recent years, as a global art category it is still in its infancy. “The Chinese contemporary art market got started around the early ‘90s with the secondary market taking off in the early 2000’s. Meanwhile, Western contemporary art is classed loosely as works from the early 1970’s. Therefore, in direct comparison, the Chinese contemporary art market would be considered in its infancy.

“Art Works foresees the emergence, development and further growth of, yet unknown Chinese contemporary artists as well as those currently occupying the market place. The potential for large scale growth moving forward is huge.”

Recession-Proof Asset?

Mr. Sadler believes that for the long term, the art investment market in Singapore and the region is certainly something to consider. “The stability of art value throughout the global financial crisis of 2008 proved to the world that as an asset class art can be recession proof. Therefore, diversification of one’s portfolio into the art sector is seen as a shrewd move.”

With sales in the Southeast Asian market growing, there’s plenty of opportunities in this region. “The whole of Southeast Asia has an interest in art investment. With the backing of the Singapore government who has invested heavily in art facilities, we have seen a growth in transactions done in Singapore,” Mr. Sadler comments.

“Additions of galleries and world class FreePort storage facilities (a highly secure storage vault for high value collectibles, providing collectors with a facility for long term storage and trade of their collections without attracting customs duties or GST) have created an extremely solid and fertile platform for investors,” notes Mr. Sadler, adding that there’s also good support for young artists in Singapore.

An area that Art Works is planning to develop is emerging Singapore artists and Southeast Asian contemporary art. “Another side of our business is the lease business, which is about aesthetics and what matches with offices and the brand of their company. So we think bringing in Singapore artists is great, because the companies are connecting with the local artist community,” Mr. Sadler adds.

For Art Works, one of the challenges impacting Asia’s art investment market is educating investors (the company has about 90 per cent Singapore-based clients at the moment). “Buying a tangible asset which can sustain global economic fluctuations is a shrewd move for any investor. That’s where Art Works come in, with our background we can aid in educating investors on which artists have the potential for growth and aiding in liquidating the asset at the right time,” says Mr. Sadler.