[SG] Art Investing - Art Works


  • Community Manager

    Hey everyone!

    Was speaking to @limjimmy at a meetup last month, and he briefly shared about Art Works, a fine art investment gallery based in SG, HK and AU, which allows investors to earn rental returns upon the purchase and subsequent leasing of an art piece (to their handpicked clients).

    This investment product they're offering is based on and identical to the property buy-to-lease model.

    Has anyone heard of them / tried their investment services? :)

    Do share your experiences!


  • Emergent

    What’s the website?


  • Community Manager


  • Emergent

    Thanks. It’s not for little people though. Need substantial amount of money to start (20k). Earning guaranteed rates via from leasing is a good idea while you wait for price appreciation. That is if the piece you own gets leased.

    I would not advise people to put a substantial amount of investment funds here as yields are so-so and actual selling value is still questionable. Good diversification vehicle for those who have money to spare.


  • Community Manager

    @jomni Understood on your concerns! Do you have any views on its potential for price appreciation per se?


  • Emergent

    @kaeley-wn said in [SG] Art Works:

    @jomni Understood on your concerns! Do you have any views on its potential for price appreciation per se?

    I’m not an art expert so I don’t know. :) But it really depends on who painted the piece and if he/she really has or will potentially have a following.

    But I’d love to get into the market if I have spare cash. It may be a good diversification vehicle if done right. Their advisory service seems to be valuable for newbies. I guess that’s why the returns are less. Art incurs storage and insurance fees by the way.



  • @jomni Agree, the investment is 20K min and like other investments it can appreciate. I registered with the site and a person called and sent me the details. They also have a gallery, where we can view and discuss. Even though i registered i am bit hesitant as i am almost zero in appreciating art. More over my initial thought was like crowd funding so we can diversify..but it is not and you own the art, 20K is not a small amount for me.



  • I have been investing in fine art via Art Works since Jun 2015 . I would like to share some highlights about the investment based on my own experience:

    • They have corporate clients who choose from an array of art pieces from the catalogue for leasing at their corporate spaces such as meeting rooms and hotels.

    • They also have retail clients like myself, who purchase art piece(s), which will be leased out to corporations and earn rental income out of it.

    • They will secure the 2-year rental contracts of the art pieces, before it is sold to retail clients, so that retail clients will receive their first-month rental income starting the next month.

    • Most of the art pieces are valued at least SGD20,000 . Hence it is really not for small investors. As a guide, if one can afford to invest in residential or commercial property with at least SGD20,000 down-payment, he/she should be able to have the funds to invest in fine art.

    • All art pieces come with independent valuation document as proof of ownership, and insurance purposes covered by Chubb Insurance (see attached image below for illustration).

    • The independent fine art adviser and valuer is Brenda Colahan, who is a director of Brenda Colahan Fine Art (BCFA). She is approved to value Australian and international paintings after 1880, and indigenous art after 1970 . You may view her accreditation here.

    • After the first 2-year rental contract has ended, there are a few options (non exhaustive):
      (1) The corporate client will want to have the same art piece re-lease for at least 1 more year.
      (2) The art piece will be return to the catalogue, and ready to be leased to another corporate client.
      (3) If (2) occurs, the retail client can choose to trade the art piece for a higher-valued one and top-up the difference, and then lease the higher-valued one to a corporate client.
      (4) The art piece will be put up for sale at exhibition houses.
      Except for (1), the art piece will be subjected to re-valuation by the same independent art valuer.

    Attached image:
    0_1550664246587_Valuation Yin Jun Edit.jpg


  • Contributor

    Thanks for your sharing @limjimmy

    Very insightful!

    Just curious, for the piece (or pieces) that you have purchased, have they been renewed for leases after the 2 year mark?



  • @dc Yes, in the recent one, they have been revalued up 3%-21% after 2 years and then re-leased for 1 year.


  • Emergent

    @limjimmy said in [SG] Art Works:

    @dc Yes, in the recent one, they have been revalued up 3%-21% after 2 years and then re-leased for 1 year.

    Looks promising



  • How much do you have to know about art to analyse the potential of the piece you bought well?



  • @arigatomon The artist has to have track record of auction sales and exhibitions in his/her resume.


  • Contributor

    @limjimmy Thanks a lot! looks like a lucrative investment.

    What are the risks? When can you lose money? and how much?

    They also have retail clients like myself, who purchase art piece(s), which will be leased out to corporations and earn rental income out of it.

    Do you have to buy the whole piece yourself? Can you buy like a portion of the investment into an art piece?

    @incomesiva

    Agree, the investment is 20K min and like other investments it can appreciate. I registered with the site and a person called and sent me the details. They also have a gallery, where we can view and discuss. Even though i registered i am bit hesitant as i am almost zero in appreciating art. More over my initial thought was like crowd funding so we can diversify..but it is not and you own the art, 20K is not a small amount for me.

    haha agreed. i am a total noob in appreciating art. but art investing is more financial than artistic. one of my friends does art investing and he thinks monalisa is a piece of c**p! :P



  • @jonhan said in [SG] Art Investing - Art Works:

    @limjimmy Thanks a lot! looks like a lucrative investment.

    What are the risks? When can you lose money? and how much?

    They also have retail clients like myself, who purchase art piece(s), which will be leased out to corporations and earn rental income out of it.

    Do you have to buy the whole piece yourself? Can you buy like a portion of the investment into an art piece?

    Had that question too. They should totally try crowdfunding this? Most of the art pieces are valued at least SGD20,000, so the people they can reach & thus the volume they can support is limited. Unless the big ticket investors have immense trust in this field to buy many pieces hmm.



  • Since returns are always 5%, is this considered a lucrative investment to you @limjimmy or just another passive investing avenue?


  • Contributor

    @incomesiva said in [SG] Art Investing - Art Works:

    More over my initial thought was like crowd funding so we can diversify..but it is not and you own the art, 20K is not a small amount for me.

    Doesn't look like we can take part in crowdfunding. sigh :(


  • Community Manager

    @limjimmy actually I do have the same question @mignonlim had for you above; also, really curious to find out if any of your contracts have ended yet? I'm sure some of us here would have this question -- what happens if option 1, 2, 3 and 4 somehow do not manage to get the art piece sold, does that mean that capital could be locked in for as long as it is unsold & still within our ownership?



  • Interesting, is this regulated?



  • @kaeley-wn @mignonlim It's another passive investing source and also capital appreciation. Till date, 2 of them are still on rental and 1 of them is on sale.

    If options 1, 2, 3 and 4 somehow do not manage to get the art piece sold, the capital will be locked in as long as it is unsold and still within the ownership.

    @cheerycards There is no local regulator here on art investing.

    By the way, do check out the other art business post called Blue Ocean. Some similarities in business model between Blue Ocean and Art Works, just that Blue Ocean has art pieces as low as $9,000 .


 

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