Sotheby’s expands Hong Kong footprint with cavernous new exhibition and retail space

By CNN Newsource

Published July 29, 2024 8:28 PM

By Oscar Holland, CNN

(CNN) — A fossilized mammoth skull, centuries-old ceramics and Banksy’s famous self-shredding painting are among hundreds of high-value collectibles on show at Sotheby’s ambitious new retail outpost in Hong Kong.

Somewhere between a boutique and a gallery, the auction house’s self-styled “Maison” offers a host of luxury objects across two floors of a mall in the city’s Central financial district.

With younger collectors seemingly in mind, items on the first floor range in price from 5,000 to 50 million Hong Kong dollars ($640 to $6.4 million). The 24,000-square-foot space, designed by Dutch architecture firm MVRDV, features a series of thematic “salons” leading to a cavernous exhibition area below.

The venture is the latest signal that major auction houses still consider Hong Kong to be their long-term hub in Asia. It is also an apparent vote of confidence in the local luxury market amid fears that slowing spending in mainland China will impact high-end retail in the semi-autonomous city.

Luxury rebounding

Hong Kong has long been the center of the auction business in Asia. The city’s spring and fall sales attract collectors from around the continent, particularly those in China, who are lured by the tariff-free imports on art and other luxuries. Chinese art sales, which include those made in Hong Kong, grew by 9% in 2023 as the county reclaimed its spot as the world’s second largest art market, according to UBS and Art Basel’s latest annual report.

But while luxury spending rebounded after Covid-19 restrictions were lifted in early 2023, that year’s fall auctions were “considerably slower,” the Art Basel and UBS report added.

Growing economic uncertainty in China, which is experiencing weak spending and a stagnant job market, has knock-on effects for Hong Kong, a traditionally popular destination for shoppers looking to avoid sales tax on the mainland. Earlier this month, the city’s government announced it was tripling the duty-free limit for mainland visitors, from 5,000 to 15,000 yuan ($689 to $2,068) per trip, in a bid to attract more shoppers from across the border.

Yet, Hong Kong’s luxury sector has emerged as something of a bright spot given the economic uncertainty. The accounting and consulting firm PricewaterhouseCoopers projects that the territory’s personal luxury market will grow 4.5% a year until 2030, when it will be worth an estimated 125.8 billion Hong Kong dollars ($16.1 billion).

Major fashion houses are also betting on the city, with Louis Vuitton hosting an historic menswear runway show in the city last year, before opening a major new premises in the Causeway Bay shopping district having shuttered its store there three years earlier. In June, Hermès also unveiled its expanded retail space in the neighborhood.

Auction house hub

Founded in London in 1744, Sotheby’s has been under the ownership of French-Israeli businessman Patrick Drahi since 2019. Asian markets have proven increasingly lucrative for the auction house, whose latest client data shows that more than 28% of bidders in sales of artworks valued over $1 million were based in the continent.

As a result, Sotheby’s has increased its presence in Asian cities, including Singapore and Shanghai, in recent years. It has simultaneously sought to grow its footprint in Hong Kong — not only with its newly unveiled Maison, but also a nearby 36,000-square-foot regional headquarters, due to open later this year.

Rival auctioneer Christie’s has also committed its future to the city and will relocate to hugely expanded headquarters (in a new skyscraper designed by the late architect Zaha Hadid’s firm) in September. Auction house Phillips meanwhile opened its new site in the city last year, with competitor Bonhams scheduled to move into a 19,000-square-foot space this fall after reporting surging sales in spring 2024.

Sotheby’s, however, is the first among them to attempt such a large brick-and-mortar retail venture in the city. In a press release, managing director of Sotheby’s Asia, Nathan Drahi, described the new Hong Kong space as more than a store, calling it a place for art and culture enthusiasts “to engage with and be inspired by extraordinary objects and experiences.”

The auction house is set to open a similar retail and exhibition space in Paris later this year, before launching another in New York in 2025.