DUBAI (Forbes Middle East) -- In 2022, art ranked as the top-performing investment among luxury asset classes with an increase of 29% year-on-year, according to the 2023 Knight Frank Luxury Investment Index (KFLII).
“Several single owner collections, including works owned by Microsoft founder Paul Allen and American investor Anne Bass produced totals in excess of $2.5 billion, more than doubling collection sales in 2021,” Sebastian Duthy, of Art Market Research, said in a statement. “With the provenance of a high-profile collector, blue-chip works routinely break auction records, and last year was no exception with five achieving over $100 million.”
Record-breaking sales volume is another strong indicator evidencing the consistent demand and desire for art investments. At $8.4 billion, global auction house Christie’s recorded its highest annual sales total in 2022 in art market history.
The robust international growth and interest in art as an investment vehicle aren’t in isolation; the Middle East is also a hot buyers and traders market.
In 2023, the Middle East’s contribution to the global art market is forecasted to hit $111 billion, according to Statista. The figure isn’t an unreasonable estimate considering the wave of temporary art exhibitions, talent, and investors convening in the region in the first quarter of this year.
In January, Sotheby’s partnered with Saudi Arabia’s Inaugural Islamic Arts Biennale to bring together impressions of faith and artistic expression. Meanwhile, the 4th edition of Art Cairo was held at the Grand Egyptian Museum in February, gathering over 150 modern and contemporary artists. In March, the UAE welcomed international visitors to the 16th edition of Art Dubai, a leading platform for artists from the Global South. Diriyah Biennale Foundation also hosted its inaugural Islamic Arts Biennale in Jeddah in March, marking the first biennale globally dedicated to the Islamic arts. This year also brought Christie’s famed Art+Tech Summit to the Middle East for the first time, held at Art Dubai. From February to June 2023, the Sharjah Biennial 15th edition brought together over 150 artists from 70 countries.
“The Middle East has pioneered different art forms over time and has seen influences of art from around the world,” Muhammad Saeed Al Shehhi, CEO of A.R.M. Holding, told Forbes Middle East. A UAE-based private investment firm, A.R.M. Holding became the first corporate patron of the Dubai Collection, the first institutional art collection in the emirate of Dubai. The company also has a multi-year partnership with Art Dubai.
“Uniquely positioned between the East and West, the region continues to feature the work of artists from around the world in several initiatives that take place throughout the year due to the existing and growing interest in art. Additionally, the region is known to embrace new technologies and trends, allowing the consumer to stay ahead of the curve and be ready to embrace digitally enhanced lives. There is a strong appetite for digital art already, and we will only see growth,” Al Shehhi said.
Prioritizing variety, purpose, and inclusivity in art is significant, even from a sales standpoint,
 as data points to the rise of millennials as buyers.
Around 86% of younger collectors – those under age 35 – consider art a social-impact investment, compared to just 32% of those over 35, according to Deloitte and ArtTactic’s Art & Finance Report 2021. For the next generation of collectors, social impact is the leading motivation alongside emotional value. Similarly, the 2021 Artsy survey found that two-thirds of collectors were driven to buy art to build connections. To keep this demographic engaged and prepared for the future, decision-makers must cater to the stakeholders of tomorrow in their design and selection choices.
From the perspective of art curators, the demand can be a good challenge to have, albeit done responsibly. “The speed at which new projects and structures are being set up in the Middle East today is astounding,” Mila Askarova, founder of London-based Gazelli Art House, told Forbes Middle East. “The challenge here is identifying the local pool of artists that can keep up and produce enough work to be able to feed the infrastructure at the speed it is growing. There is a colossal opportunity to make the region into a collaborative, vibrant hub for the crossover of international and local artists.” Among the regional artists under their wing, the Gazelli Art House has represented artists Naqsh Collective, who exhibited their artwork at Art Dubai, based on the traditional motifs of their Palestinian roots.
For A.R.M. Holding’s private art collection, artists are selected consciously and with intent. “We prioritize work that is environmentally conscious, rich in identity, and that celebrates the diversity of nationalities and cultures that call Dubai home,” Al Shehhi explained. “We dedicate a significant amount of the collection to emerging artists, both local and international. It is important to us that the art we bring into our collection speaks to these values and helps to create an atmosphere of inclusivity and creativity.”
Unsurprisingly, digital art aficionados have also helped cultivate a market for visual mediums.
Gazelli Art House launched its GAZELL.iO digital residency in 2015. In 2022, Art Dubai introduced the new Art Dubai Digital section to help audiences navigate the space of digital and new media art and understand more about the technologies driving it. Across the pond at Singapore’s Art SG in January 2023 – the largest art fair in Southeast Asia – a ‘Reframe’ sector was dedicated to art produced in digital media.
Benedetta Ghione, executive director of Art Dubai, points to the crypto boom in 2021 that activated a whole new audience of buyers and traders interested in Non-Fungible Tokens (NFTs). “But NFTs are just one manifestation of the digital art world, and one that attracted the most hype at the time. The technology that underpins this is incredibly interesting, and it is here to say,” she told Forbes Middle East.
At Art Dubai 2023, Gazelli Art House represented artist Brendan Dawes’ four pieces on ‘Persian Dreams,’ combining artificial intelligence and motion-captured choreography. “From our end, we have had to be cautious of what we support and exhibit as, very often, the ambitions and interests of both creatives and buyers in this space are short-term,” Askarova revealed. “We are interested in the longer vision of playing our part as a gallery and building on a sustainable international market for the artists we work with beyond the volatility of marketplaces, currencies, and artificial hype over artists and projects.”
Despite the rapid adoption of digital art and its investments, experts confidently concur that traditional art mediums can’t be replaced. According to Al Shehhi, traditional art has been a major part of Middle Eastern culture for centuries and will remain so for the foreseeable future.
“Traditional art mediums are as old as humanity itself, and the value we place on creativity and art means that traditional media forms are firmly here to stay,” Ghione noted. “Of course, there will be fluctuations in tastes and the market for specific artists, but that’s always been the case.”
Ultimately, as technologies become more mainstream and markets mature, investment opportunities will become clearer. “As always, when collecting art, buy what you love should be the mantra,” Ghione concluded.