Art, wine & classic cars: Bet on these luxury assets

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Published: September 14, 2018 2:28:54 AM

Art works top the Knight Frank Luxury Investment Index in 2018 followed by wine and classic cars

KFLII, luxury asset, Leonardo da Vinci’s Salvator Mundi, Wine Owners, HAGI Top IndexDelving beyond the 25% headline figure—based on analysis of auction prices by Art Market Research (AMR) – it’s clear that not every genre is moving at the same pace.

At the beginning of 2018, art had surged to the front of the Knight Frank Luxury Investment Index (KFLII), which tracks the performance of ten luxury asset classes. Six months on, it is holding its own, with annual growth of 25% to the end of June. Given the $450 million sale of Leonardo da Vinci’s Salvator Mundi last year, it is unlikely that we will see a new record price for a painting anytime soon. However, in May, Sotheby’s did set a new company benchmark with an impressive $157 million for Amedeo Modigliani’s sumptuous Nu couché (sur le côté gauche).

Delving beyond the 25% headline figure—based on analysis of auction prices by Art Market Research (AMR) – it’s clear that not every genre is moving at the same pace. Contemporary art, for example, recorded a slight drop, while the market for Old Masters is making something of a comeback, with average prices rising by 24% over the past year.

“Since Salvator Mundi was confirmed as a lost masterpiece by Leonardo da Vinci, auction houses such as Christie’s in London, Dorotheum in Austria, Pandolfini in Italy and Lempertz in Germany have been embracing unattributed Old Master paintings,” explains AMR’s Veronika Lukasova.

“Unattributed works that are connected with stellar name artists, for example, ‘Follower of Canaletto’, can regularly achieve higher prices than some firmly attributed works by lesser artists. The uptick is undoubtedly having a knock-on effect across the whole Old Master market.”

Wine remains in second place in the rankings, with the Knight Frank Fine Wine Icons Index, compiled by Wine Owners, recording annual growth of 7%. “This year has been about consolidation,” says Wine Owners’ Nick Martin. “Some of the more expensive, older vintages are coming off their peaks, while others power ahead. Burgundy continues to defy gravity as it adds another 14% in the year to date, compared with Bordeaux first growths at less than 3% overall. Over three years, Burgundy has risen 85% compared with 45% for first growths.”

Following a shaky start to 2018, classic cars have raced back to take third place in the KFLII. Annual growth at the end of Q2 2018 stood at a respectable 6%, according to the HAGI Top Index. However, HAGI’s Dietrich Hatlapa cautions against assumptions that this presages the beginning of another classic car bull run. “The market is still very cautious,” he says.

Really rare cars are still making good money, though. A Ferrari 250 GTO, sold privately recently, is reported to have made $70 million, while RM Sotheby’s set a record for the most expensive car to sell at auction when it sold another 250 GTO (pictured) for $US48.4 million at the recent Monterey sales.

Edited extracts from Knight Frank Wealth Report Autumn Update 2018

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