Why Dubai’s burgeoning arts and culture scene is attracting some serious international backing
At the Bischoff/Weiss gallery, located just off Berkeley Square in London, Paola Weiss has not long returned from Art Dubai, the Arab World’s largest and most established contemporary art fair. The trip has been a huge success: Bischoff/Weiss’s participation not only allowed the gallery to gain much-needed visibility in the Middle East and form exciting new relationships with major collectors from the region, but also to register sales which comfortably exceeded expectations. “People were in the mood to spend money, and not only because they wanted to buy art as a decorative element, but because they really have an interest in collecting art,” says Weiss. “We were close to £100,000 (US$165,000) and our average sale was between £3,000 (US$4,856) and £10,000 (US$16,189). That’s a lot of volume. We’ll definitely be back in Dubai next year.”
Dubai is experiencing something similar to the ‘Bilbao Effect’, whereby the popular and critical success of the Guggenheim Museum in Bilbao, Spain, by Frank Gehry, brought huge financial growth and prestige to the city
Bischoff/Weiss was just one of 81 galleries represented at the 2011 fair, which attracted more than 20,000 guests and registered a 30 per cent increase in international visitors over the previous year. And Art Dubai represents just one example of Dubai revelling in its role not just as a showcase for culture, but as a marketplace for the creative arts industry – annual events such as Dubai International Film Festival (DIFF) and Emirates Airline Festival of Literature have become landmarks on the global arts calendar.
“We have positioned ourselves not only as the leading fair in the Middle East, North Africa and South Asia (MENASA) region, but also the most global art fair, and this is something that international visitors are particularly excited about,” says Antonia Carver, Director of Art Dubai and a former member of the programming team at DIFF.
“The Museum of Modern Art (MoMA) in New York came to the region for the first time this year, and its director, curators and board of patrons all came to the fair and connected with this part of the world,” she continues. “Not only is it exciting, but it is now essential, to be a part of what’s happening here.”
The global appeal of the Dubai arts scene is reflected not just on the red carpets, but also in the auction houses of major players such as Christie’s, which opened its first sale season in Dubai in 2006, and has since sold more than US$200m worth of art in high-profile auctions in the emirate. The bidders are a truly international bunch – at its most recent sale in April 2011, 45 per cent of participants were from outside the Middle East – and Dubai is settling into a familiar role as a gateway between the region and the rest of the world.
“Dubai has long been a trading capital and the point at which, in terms of business, different communities come together and project themselves out to the international world,” notes Carver. “That has been going on for decades in business, and Dubai is now fulfilling the same kind of role for contemporary art.”
International moneymen are taking notice, too. Over the last decade, art has emerged as an attractive alternative asset class, offering an effective hedge against inflation and precipitating the rise of investment management and consultancy firms such as the London-based Fine Art Fund Group (FAFG), which offers investors from around the world the chance to buy directly into the art market.
“Art is an asset class that has held its value during the downturn in the stock market,” says Philip Hoffman, founder and CEO of FAFG. “Our clients are always interested to see that on every artwork that we’ve ever sold, in every year since inception, we’ve made around 25 per cent compound return. There is money to be made.”
According to Hoffman, the group has made around US$50m in sales and US$15m in profits from its funds and private accounts since its inception in 2001. Today, it has a dedicated Middle East team which is represented through Dubai; Hoffman estimates that between US$50m and US$100m worth of Middle Eastern art comes on the market each year, of which as much as 70 per cent is traded through the emirate. This may pale when set against the global investable art market, which rests at around US$10bn per annum, but is significant because of its potential for growth, as well as the emergence of a new breed of investor from the region.
“From a Westerners’ viewpoint, people find it easy to go to Dubai as it’s more relaxed than places such as Saudi Arabia or Iran, and more like London or New York,” says Hoffman. “Dubai’s the hub for the region; most businessmen tend to fly through it, and therefore they find that buying art is an easier thing to do out of Dubai.
“In the next five to 10 years we’ll be looking at an annual value of US$200m to US$400m, at least, for Middle Eastern art,” he continues. “We’re also seeing a lot of private collectors starting to build impressive art collections in the Middle East, and we’re acting for some of them who are looking to allocate between US$2m and US$10m into art.”
Like any other sector, the arts and culture industry is built on relationships. And that’s why events and gatherings such as Art Dubai and DIFF represent an invaluable opportunity for the international business community to engage with artists and ideas under one banner.
“These events are absolutely essential because they bring people together in a very concentrated fashion, which means that people exchange ideas and do deals that are rooted in Dubai,” says Carver. She points to the ‘Bilbao Effect’, whereby the popular and critical success of the Guggenheim Museum in Bilbao, Spain, by Frank Gehry, brought huge financial growth and prestige to the city. During events such as Art Dubai or DIFF, the emirate is buzzing, its hotels teeming with creative talent and restaurants heaving with industry heavyweights.
“It’s not only the direct financial investment into the city during those events, but it’s the kind of people that will be there – decision-makers and opinion-formers going back to their countries and talking about Dubai,” notes Carver. “If you have the board of MoMA, the major donors to that museum and key society people in New York at dinner parties talking about Dubai and what a great time they had, then that’s gold dust.
“We’re breaking through any barriers or misconceptions that might exist about Dubai, the Gulf, or the wider Middle East, and that’s not going to be achieved by advertising,” she adds. “It’s going to be achieved through showing people what this city has to offer, and them talking about that when they go home. That’s absolutely invaluable to Dubai as a city.”