Luxury Interview: Art for investment's sake

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by Rebecca Foster

Art gallery turned corporate leasing firm, Collins & Kent International (C&K), works alongside private clients looking to invest in fine art, which can offer returns of up to 7.5 percent of a painting’s worth annually through the company’s corporate leasing scheme. Property Report caught up with Troy Sadler, C&K’s sales director in Asia, to talk art, investment and Andy Warhol.

Troy Sadler joined Collins & Kent back in 2001 when the company was based solely out of Australia and before its expansion into the corporate leasing sector. Though not formally schooled in art, years of experience at C&K have allowed Sadler todevelopaneclectictasteandcomprehensive knowledgethe works of the 20th century masters.

“I really like Andy Warhol’s ‘Marilyns’ because it’s such an iconic image,” he says. “We also have a linocut in our gallery at the moment by Picasso, which depicts his muse Jacqueline in a hat. It’s both beautiful and haunting.”
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C&K expanded into the corporate leasing sector in 2006, and has extended operations to Hong Kong and Singapore in the last three years, where the business is going from strength to strength.

“We launched the corporate leasing arm due to high demand,” explains Sadler. “It started off with just our own artwork, but as the concept took off our private stock was drying up so we also started offering private clients the opportunity to put their works into the corporate leasing business. It’s a great way for clients to earn an income off their artwork, and also great for us to continue expanding the business, so it was a win-win,” he adds.

Rather than focusing on oil and canvas pieces that can fetch astronomical prices of up to US$15 million at auction, C&K focuses on the more affordable side of the market, which often means works on paper as opposed to canvas. The artists in C&K’s rich portfolio include some of the biggest names of the last century, including Picasso, Warhol, Miro, Matisse and Dali. Works by Picasso and Warhol have thus far proven to be the most popular in Asia, along with the surrealist works of Joan Miro, and since expanding into Asia C&Ks corporate leasing sector has been a huge success.

“Warhol and Picasso have surpassed the word artist. They are icons, and even people who don’t know anything about art know who they are,” says Sadler. “The biggest difference from

Australia to Asia is the corporate rental business. It’s really taking off here, as opposed to in Australia where the private client side is growing faster.”

According to Sadler, investing in art is a lot like investing in property,asownerscanearnanincomefromtheworkswhen they lease it out.

“It’s a tangible asset, and it’s very clean,” he says. “Once you own the artwork and lease it out there are no extra fees or issues. It’s three years of net income at 7.5 percent. You also own a piece of history, so it’s quite special.”

In markets like Hong Kong and Singapore, Sadler believes that investors are choosing to spread their risk as a result of higher stamp duties recently imposed on the property markets. Whilst it’s important for C&K’s portfolio to feature works that drive high returns for investors, it’s also vital that they bring prestige to corporate clients, as well as providing visually uplifting artwork for the workplace.

“We have definitely noticed a spike in the last couple of months since the stamp duties doubled,” says Sadler, “but I think it’s also a little bit of a status thing. It’s great for clients to be able to have the Picassos or the Miros in their offices, and a lot of the best pieces seem to go into the board room where clients can show them off.”

Despite acknowledging the great prestige that comes with big names like Picasso and Warhol, Sadler also emphasises the importance of making art accessible to as many people as possible and extracting the works from the elitist sphere they can sometimes be associated with.

“Art shouldn’t be so complicated,” he says. “We try to make our galleries accessible to as many people as possible by making it easy for people to walk in and have a good time.”

With plans to expand to Dubai and Shanghai on the horizon, it seems C&K will continue to meet the demands of investors and art enthusiasts across the globe by making sure legendary works of the 20th century masters reach out to an ever wider audience.

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