In May and November, in the plush halls of the Wheatbaker Hotel in the serene and highbrow neighborhood of Ikoyi, Arthouse Contemporary, one of Nigeria’s premier art auction houses, holds its bi-annual auctions.
The event attracts collectors, enthusiasts, captains of industry, FORBES-listed billionaires and press. Gourmet hors d&#8217;oeuvres are served; champagne is held in ornately bejewelled hands; boardroom and country club gossip is swapped; and business cards are exchanged. The honey that brought the bees – the art – is sometimes just the backdrop for this rich assembly.
<div id="attachment_3639" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-3639" class="size-medium wp-image-3639" src="/wp-content/uploads/2017/04/image2-300x167.jpg" alt="" width="300" height="167" />Imags of artworks from the Terra Kulture archive collection</div>
Hours later, exquisite pieces by masters such as El Anatsui, Bruce Onobrakpeya, Kolade Oshinowo and Ben Enwonwu are on offer and hammer prices peak in the $75,000 to $100,000 region – bought by the bourgeoisie crowd.
Although grand, elite auctions like this are infrequent in Nigeria. The country has a sprawling art industry with thousands of artists crafting their creations. However, most do not have access to exclusive auctions and other platforms that will enable them to sell more of their work and at higher prices. Who are they creating for, who is buying and how much is being sold? These questions are suspended like hot air balloons over the art industry and their answers have metamorphosed over time.
Over a decade ago, artists, many regarded as masters today, could only sell their works by hawking them out of the trunks of their cars and the consumers were a small number of patrons and collectors.
“Artists didn’t have the necessary platforms to showcase their works and also art was seen as an exclusive commodity, it was elitist in approach,” says Bolanle Austen-Peters, Founder and CEO of Terra Kulture, a cultural center that houses a leading gallery
in Lagos.
The members-only mindset and lack of platforms limited access to artists’ work and the possibility of more artwork being sold. Ten years later, galleries, auction houses and art pop-up shops, such as Terra Kulture, Nike Art Gallery, Omenka Gallery, Art Twenty One, Rele, The Art Social, have sprung up to close the gap for artists and increase the trade in contemporary and modern art.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-3640" src="/wp-content/uploads/2017/04/New-300x214.jpg" alt="" width="300" height="214" />
“Artists are now more confident as they have these platforms. Also, these art spaces and galleries became rallying points, conduits for social exchange. It created a new wave of art collectors and enthusiasts; it became a social movement,” according to Austen-Peters.
Are these spaces enough though? Has it translated to more people buying art in Nigeria?
“Yes, but I think with any industry, there’s always room for growth,” says Adenrele Sonariwo, curator of a newly-minted gallery, Rele, that represents, brands and promotes artists, rather than merely staging exhibitions.
“There’s already a dedicated following among high-net-worth individuals. They regularly collect and commission works. Where work needs to be done is with the middle class. They need to be exposed to art and learn to appreciate it. They need to be educated more about its relevance and this knowledge can then be translated into sales.”
It seems then that the spectre of elitism still hangs over the art industry. The old challenge remains: spreading the word. There are plenty of fish but the net needs to be cast wider.
“In Nigeria now, there is a growing middle class with disposable income to buy and invest in art but they cannot invest in what they don’t know,” says Tayo Quaye, an internationally renowned printmaker and painter.
Auction houses need to build confidence in potential clients, to recognize the value of art and invest accordingly. This is a challenge being tackled by Kavita Chellaram, CEO of Arthouse Contemporary.
“The main obstacle we saw at the creation of Arthouse Contemporary was the absence of a secondary market for art acquisitions. While art collectors were already engaging artists to buy from the primary market, there was a question mark on the return of its value. Our auctions seek to fill this gap in making the art business justify itself in Nigeria,” says Chellaram.
Even if Nigeria’s middle class started to appreciate art, it remains to be seen whether they could be persuaded to buy it. If contemporary Nigerian art pricing trends are anything to go by, they may need to win the lottery. Auction houses are often the launchpad from which prices spring up; well-heeled Nigerians being more than willing participants in the hobby. We are a people that thrive on exhibitionism so when artwork is being vied for, it’s not always a measure of its worth but a result of financial muscle flexing. This is great for the artist but ultimately unsustainable.
Alternatively, galleries, such as Rele have fixed, inclusive prices starting at $225. There are not enough of these modestly priced artworks though. Despite this, more Nigerians are buying art, largely dictated by the depth of their pockets and their artistic leaning.
The Nigerian art industry remains an emerging market. Though the bulk of the business is done by oil magnates and well-travelled socialites in upmarket hotels and galleries, ordinary people off the street are becoming more active. Both classes of connoisseurs may yet share a bottle of Sauvignon Blanc in spaces that cater for their contrasting taste and financial might – a picture-perfect frame of good business. <img loading="lazy" decoding="async" class="alignleft size-medium wp-image-3642" src="/wp-content/uploads/2017/04/image1-300x196.jpg" alt="" width="300" height="196" />

Art Needs To Play To The Gallery

Art can pull you in deeply. Expressive and raw, it can be believably real, and not. Just like life, it has a fascination; it shows us that it goes on all the time, in straight lines, or abstract.
For all our over-civilized attitudes toward art, our relationship with it is still primal. We are consumed by its emotional involvement with us, constantly wanting to understand its intuitive physical movement in all that stillness, captured on canvas, paper or stone. No wonder it is known as an ‘investment of passion’.
But art is turning out to be more than an unthinking love affair with the aesthetic. It is a tangible investment, and the numbers do not lie. In 2011, the European Fine Art Foundation estimated the global art market was worth $60 billion, a six-fold increase over the past two decades. In 2012, sales at Christie’s auction house were more than $10 billion, up 10% from 2011. And the Citadel Art Price Index, which looks specifically at the South African art industry finished 2012 on a high, at 12.2%.
True, in the past, art was considered a high-end collectable, available only to extremely wealthy individuals. But thanks to the emerging market, trends are finally changing and art acquisition is far more transparent, less guarded and opaque.
Like most investments, buying art requires thought and consideration – it is not only about what is pleasing to the eye. FORBES WOMAN AFRICA spoke to the CEO of Business and Arts South Africa, Michelle Constant, to get a clearer understanding of what you need to get started.
“Let’s face it. Investing in art is a dual investment – both emotional and
financial. Once you invest, you’re stuck with the work as a long-term investment. So first and foremost you must love it. It’s an incredible relationship, owning but also loving the piece of work you’ve bought,” Constant says.
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<h4>WHERE TO BEGIN</h4>
Art is not that much of an enigma. Sometimes it is best to keep it simple. According to Constant, it is useful to visit “galleries, auctions and art fairs, they are good places to get a feel for art and the type of artwork you might want to buy”.
It is also about being informed; you have to learn how the market operates. Sometimes it is best to take at least a year to wrap your head around the ins and outs of the creative space of the industry, before you set out to choose your first artwork. Most importantly, you need to understand your aesthetic, Constant advises. What kind of art do you like? Do you lean more toward painting, sculpture or print, to name just a few?
“Read art magazines and websites (The SA Artist Magazine or www.arttimes.co.za) to find out about openings,” she explains. If you are inte-rested in learning the basics or the history of art by studying a formal course, there are several on offer in South Africa. A good place to start is probably the online directory: www.art.co.za/training.htm. “A great book to read, which will give you wonderful insight, is Seven Days in the Art World by Sarah Thornton,” Constant suggests.
Once you have a feel for what you want to buy, engage.
“Go to galleries, auctions, talk to curators and collectors, the market’s expert consultants, so that when you buy your first piece, you are competent in the subject matter.” Try to attend the annual FNB Joburg Art Fair in South Africa, or the Affordable Art Fairs, which take place in America, Asia, Europe and the UK.
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<h4>WHAT TO BUY</h4>
“When it’s time to buy, buy according to what you love, because the return on investment is not guaranteed. What is guaranteed is that you’re going to have to wait at least 10 years, so you really should love it,” Constant advises.
“Remember, once you’ve bought your first work you need to grow your knowledge and become informed in your participation. The more you know, the more you like or don’t like, the more astute you will be in your buying.”
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<h4>WHERE TO GET ADVICE</h4>
You are looking for the kind of company that can offer a range of services – from helping you choose your art, to helping you avoid buying fakes, or stolen goods. Remember that even with all the advice that comes your way, there is no guarantee that you will make queenly profits on any work that you acquire.It is best to book an appointment with auction houses.
Some of the most well known in South Africa are:
Stephan Welz &amp; Co. (<a href="http://www.stephanwelzandco.co.za">www.stephanwelzandco.co.za</a>) Strauss &amp; Co. (www.straussart.co.za)
Artinsure (www.artinsure.co.za) Russell Kaplan Auctioneers  (www.rkauctioneers.co.za)
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<h4>HOW BEST TO INVEST</h4>
Consortiums, an art fund, or as a lone buyer? “As far as I know, there are no real art funds active in South Africa, so you would have to invest in one primarily in the UK or North Ame-rica. The problem with art funds is that they’re set up like private equity funds… but that doesn’t align with the 10-year plan. Their track record is apparently not that brilliant, in general. There are successful consortiums in South Africa. It’s a bit like a ‘stokvel’ (rotating credit unions) and it also provides excellent opportunity for emerging buyers. Importantly, though, all the individuals in the consortium must have the same long-term view.
“For me, lone ownership has been the best way to go. It has meant I can go out and buy smaller works and build my collection. It’s a much more personal process and ties into the concept of a dual investment – emotional and financial,” Constant says.
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<h4>HIDDEN COSTS</h4>
“If you buy from a gallery they will be sharing 40 to 50 percent of the sales price. The work then takes a long time to sell at that or a higher price in the secondary market (auctions, etc). In essence, you need to account for dealer costs, maintenance costs – such as archival and framing – insurance and security. This is why you need at least 10 years. In that time your artist is also building his or her brand, thus growing the value.”
Keep in mind that your artwork must remain in perfect condition. Many experts will advise you to rent proper storage facilities. South Africa is not known for major natural disasters such as earthquakes, tornados or floods, but if your pieces are stored under suitable conditions, they will not deteriorate.
For those storing art at home and on the wall, specialist insurance is key. Barrington Insurance Brokers in Johannesburg is a good place to start:
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<h4>HOW LONG TO HOLD ON</h4>
“A common argument is that for contemporary art you hold on for 10 to 12 years, whilst with modernist art  (a Pierneef or an Irma Stern) it’s around five to seven years. My personal opinion? If you love the work you hold on forever.”

Investing: The New Art Form

In May, Edvard Munch’s The Scream sold for $120 million becoming the most expensive painting to be sold at auction. A week later, Mark Rothko’s Orange, Red, Yellow sold for nearly $87 million. Irma Stern’s Two Arabs sold for R21 million ($2.5 million) last year, the highest price for a painting sold at auction in South Africa. Eleven of the 20 highest prices fetched at auction in the world and nine of the 10 highest prices in South Africa have occurred since 2008.
The near-collapse of the global economy didn’t stop the market reaching its highs. Wealthy collectors remain wealthy. And top-quality items appreciate even in poorer market contexts. Fine art auction house, Strauss &amp; Co, reported a boom in 2010 with a turnover of R187 million ($22.3 million) and a strong market for 2011 making only slightly less at R170 million ($20.2 million).
Despite hammer prices being up, masterpieces are out of the price range of many collectors and dealers. The high end of the market is one part of the story, it’s the segment that appeals to the popular imagination, and to those of us who are so insanely disconnected from the real world that we continue to hope that one day, we too may be able to buy a Malevich or a Twombly.
“The run-of-the-mill part of the market is in a sorry state,” says fine art expert and auctioneer, Stephan Welz.
“At this end of the market, dealers have in the past bought a large percentage of works as stock-in-trade to sell to the average salaried person who wants one or two nice pieces on the mantelpiece.”
It would be silly not to admit we’ve been affected. Those works least affected are those with rarity value; anything decorative has been devastated,” adds Mark Read, director of the Everard Read gallery.
<div id="attachment_927" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-927" class="size-large wp-image-927" src="/wp-content/uploads/2017/04/artauctionauctioneer-1024x755.jpg" alt="" width="474" height="349" />Steven Wlz at the Strauss and Co auction</div>
Given then that the Old Masters and historic paintings are too expensive for most collectors and dealers and, of course, there are fewer of them, dealers both abroad and locally have turned to contemporary artists, which are normally fragile in the secondary market and a highly speculative sector.
For the last two years, contemporary works have topped auction sales at Christie’s—an international company offering art auctions and private sales to clients. In South Africa, artists like Robert Hodgins, William Kentridge, Walter Battiss and Erik Laubscher are fetching good prices as the market broadens. But there are no guarantees of a handsome profit, even if you’ve studied past performance prices, says Welz, and those are less available for contemporary than older works. Some wonder, too, about the staying power of this market compared to those works time has already validated.
Markets, of course, depend not only on buyers, but also on sellers.
“When the market isn’t favorable, sellers are reluctant to sell, and they’re usually in a position to choose their market,” says Welz.
What’s more, sellers don’t know where else to invest their money since opportunities are currently few—stock markets are down, rates on savings accounts are low and interest is taxed, even gold has been volatile.
A conversation between Sotheby’s chair of contemporary art for Europe, Cheyenne Westphal and an anonymous American collector as reported in the Wall Street Journal serves to illustrate the point: “I phoned him up and told him, ‘Do you realize that in the present market, we can get you $50 million for your Rothko?’ There was a very long silence on the other end of the phone. Eventually, he replied, ‘Well, Ms Westphal, that sure is tremendous news. But what the hell would I do with $50 million in the bank?’”
To try to predict prices and understand trends, we turn to the market intelligence provided by public auctions (auctions are fairly transparent compared to private sales, prices are published and annual reports are available) and historical price indexes. But, even armed with these prognostications, one feels uneasy in generalizing across the market.
Part of the reason that trying to draw any conclusions about the health of the art market is so difficult is because that very term is a misnomer. A number of small markets combine to form the art market and while Old Masters are selling, demand for contemporary or modern art pieces may be declining; buyers supporting the fine arts market are not the same people who are buying decorative art.
The Wall Street Journal last month quoted Christie’s international as saying its art business had proved resilient and that a growing population of super-wealthy collectors were sustaining demand for top works. “We have not seen the global economy affect our business,” said Steven Murphy, Christie’s CE. The Mei Moses All Art Index, which measures art market returns by tracking the sale and resale of major art works, mainly in New York and London, claimed an 11% return for investors in 2011, outpacing stock market returns for a second consecutive year. But the problem is that not all art performs equally and most art never gains enough value to be represented at the kind of auction that index compilers track—it’s an incomplete picture. So studies like these fail to provide any proof that art is a solid investment generally.
Some economists explain the market’s relative buoyancy, saying fine art isn’t part of the global economy. Rather, they say, it is part of the booming economy of a set of super-super rich individuals or ‘Ultra High Net Worth Individuals’ who are just growing richer. For these people, and because a painting is singular and no one else can own it, an astronomically expensive work does an almost unparalleled job of saying just how wealthy and cultivated they are.
Let me illustrate what I mean. As I stood in front of the Stern on auction, Arab, I felt a little let down. It was small (66,5 x 65,5cm) and it was beautifully painted, the frame hand-carved, but I couldn’t help asking myself, ‘How can it possibly be worth R9 million [R17 million ($2.0 million) as it turned out]’, and that’s the thing, it isn’t, it signals that you’re spending money, squandering money even because what you’re buying can’t be worth that much. And it’s this fact, the fact that it isn’t a sensible way to make money that drives the trophy hunters.
But perhaps in comparing Arab to the value I would place on a house, I would be too narrowly defining an investment. Today, the value of an artwork is often determined by collectors for whom there is nothing more at stake than making money. Previously, critics and connoisseurs had some influence on which pieces were perceived to be good. “Today’s art market is by and large misinformed,” said veteran advisor Thea Westreich in the New York magazine. “People are using their ears, not their eyes, to select works, buying based on market trends rather than art-historical standards.”
The critic, Clement Greenberg, was right when he said of culture and its place in the economy of life, “a poor life is lived by anyone who doesn’t regularly take time out to stand and gaze… without any further end in mind, simply for the satisfaction gotten from that which is gazed at…” He also said, “there are, of course, more important things than art, life itself, what actually happens to you”.
Overseas, the art market is huge and growing—there is a new class of people buying art. But in South Africa, the market is incredibly small, says Stefan Hundt of Sanlam Private Investments’ art advisory service. “If we have 5,000 serious buyers, it’s a lot,” and adds it’s for this reason that an art fund wouldn’t survive.
If the economy continues to stagnate, Welz and Read anticipate tough times to come. Even if it starts to grow, since the art economy lags behind the normal economy by about a year, it will be some time before private collectors and corporates have any disposable income to invest in art.
Let art be first a pleasure, the prevailing wisdom goes, then an asset. That way, the quality verdicts of the public, which make it a capricious investment, won’t matter so much. As an asset market, says international-capital-markets expert Amir Shariat in the New York magazine, “art remains non-transparent, overly prone to taste and fashions, and extremely illiquid. People forget that illiquid doesn’t mean ‘low price’. It means ‘no price’.”
Perhaps art isn’t even an investment or perhaps it’s an investment of a different nature. There’s an intangible pleasure in owning a painting and, unlike stocks, art doesn’t earn dividends and it costs to keep—you have to look after it, make sure it doesn’t deteriorate and insure it and then there are steep transaction costs. Unlike other investments, the art object is unique, “detached from the sanity of a cause” in Samuel Beckett’s words (though less so when we look at overpriced contemporary works like Damien Hirst’s, which are made with the sale in mind). In being inexplicable, to take Beckett’s reasoning to its conclusion, art objects may be a source of enchantment, and in following the trading of these in the financial arena, emptied for a moment of the wonder they can inspire in quieter moments, we can forget that.

Tag: Auctions

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Art Needs To Play To The Gallery

Investing: The New Art Form

The Art of Art