Investing in Art that Pays – artmarketblog.com
It amazes me how wrong people can be when it comes to providing advice and giving opinions on art investment and the art market. Take for instance an article that appeared in the UK Sunday Times newspaper (http://www.timesonline.co.uk/tol/money/investment/article4925772.ece?Submitted=true) in which a partner at advisors Bloomsbury Wealth Management is quoted as saying in regards to art that “These assets are illiquid and there is no mechanism for providing a return, unlike the yield with bonds and dividends from equities. You may buy at the wrong time and have to wait years to make a gain.” This is in fact incorrect. There are several companies that sell tailored portfolios of art which you can purchase from the company who will then rent the artworks in the portfolio out to the corporate sector for display in offices and buildings giving the owner of the portfolio a guaranteed rental return in the region of 7-9%. On top of that there is the potential for capital gain.
One such company who provides such a service is Art Equity (http://www.artequity.com.au) whose website says “Purchasing a rental portfolio provides you with the opportunity to generate greater returns by renting out your portfolio to the corporate sector. Throughout the lease period you retain ownership of your artworks while receiving a rental return of between 6.5 and 9.5 per cent per annum.” Another company that offers a similar service is United Galleries (http://www.unitedgalleries.com.au) whose website states “United Galleries Buy/Lease program offers selected companies and individuals the opportunity to free up capital currently invested in artworks and return the money to the client. Clients will have the opportunity to lease back some or all of the works over an agreed period ranging from two (2) months to ten (10) years.
**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of http://www.artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.