BASEL (Reuters) - Wealthy collectors at Art Basel, the world’s top fair for modern and contemporary art, had to dig deep into their pockets this week to get hold of high-quality works, amid signs the market was returning to pre-crisis peaks.
In times of low interest rates, many investors seek to diversify their portfolios, and masterpieces by 20th century artists like Picasso and Miro, or contemporary stars such as Anish Kapoor or Antony Gormley, are in high demand.
Almost 300 private jets landed at Basel airport during the first day of the fair to fly in VIPs like supermodels Naomi Campbell and Linda Evangelista, and the crowds were still large on Wednesday and Thursday when Art Basel was open to the public.
Art lovers and dealers peered at the works on display, took pictures on the latest mobile telephones to send back to clients and slipped handwritten notes into expensive designer handbags.
“There were more people than last year at the opening. The market feels solid, not crazy, but very solid,” said Sukanya Rajaratnam, director of New York art gallery L & M Arts.
She said the gallery had already sold some of its best lots on display. An orange Mark Rothko was sold for a price “in the range of $5 million,” while a giant red tripod by Paul McCarthy changed hands for about $2.5 million.
Philip Hoffman, chief executive of the Fine Art Fund Group which has assets under management of around $100 million, said his fund had sold pieces for around $8 million on the first day of the fair alone.
“With currency volatility, cash earning next to zero and inflation at 4.5 pct in London, a lot of people are looking at art right now as a safe haven for their money,” he said.
“We’ve seen a feeding frenzy of buyers and some very good works on sale fetching world record prices, above 2007-2008 levels,” he said, adding that fairly priced pieces could find buyers within an hour or two at the fair.
Several major galleries had to re-hang their spaces due to brisk sales of their original displays, and at Daniel Templon, around 90 percent of the art was snapped up by Europeans.
“There are very few Americans this year,” said the gallery’s director Anne-Claudie Coric. “I suspect this is due to the weakness of the dollar.”
The buoyant mood was in stark contrast to 2009, when the volumes of private sales and public auctions at Christie’s, Sotheby’s and their smaller rivals contracted dramatically.
Turnover bounced back sharply in 2010 — Christie’s, the world’s largest auctioneer, saw sales hit $5 billion last year, up 53 percent from 2009, while Sotheby’s posted revenues of $4.3 billion excluding private deals versus $2.3 billion in 2009.
The emergence of super-rich Chinese investors and collectors has been a major factor behind the surge in prices for Chinese art as well as for “blue-chip” Western names like Picasso.
Some analysts warn, however, that the rate of increase in some sectors of the art market is unsustainable and a bubble could be developing.
Art Basel features about 300 galleries from around the globe, and more than 2,500 artists, including the latest generation of emerging stars, exhibit their paintings, sculptures, drawings, installations, photographs and videos.
The combined worth of works displayed at the 42nd edition of the Basel art show is around $1.75 billion, according to specialist insurer Hiscox, up around 15 percent from 2010.
“In general, the mood is extremely positive. It feels a bit like 2007 again,” said Jonathan Binstock, senior adviser at Citi Private Bank’s Art Advisory Group.
“The market for emerging artists is stronger than in recent years and this is a sign of renewed strength,” he said in Basel, adding he was advising his clients to stretch their budgets as strong demand made it harder to obtain outstanding pieces.
At the Gagosian gallery, founded by influential U.S. art dealer Larry Gagosian, Jona Lueddeckens was also satisfied with the early part of the fair that ends on Sunday.
“We had a very strong start,” he said, declining to give further details of which works had been sold.
And Florian Berktold, director of the Hauser & Wirth gallery that sold a sculpture by Ron Mueck for 450,000 pounds, added: “There are buyers from all over the world here, Chinese, Americans, Russians. There is a great energy.
“People are willing to spend again but they calculate and are selective. For a very good work they are willing to pay a good price.”
Of course, not everyone was happy about the art market boom.
Investors’ appetite for art is sometimes making it unaffordable for even the richest art enthusiasts, said a Dutch collector who was tempted by a wooden sculpture by British artist Tony Cragg but put off by the price.
“The gallery owner wants 360,000 euros for it. I would maybe pay half of that,” said the collector, who did not want to be named. Prices for works by contemporary artists like Damien Hirst or Jeff Koons could reach unreasonable levels, he said.
Additional reporting by Mike Collett-White in London