This year’s Art Basel Hong Kong, the first to welcome international visitors without strict travel restrictions since the pandemic, also marked the much-anticipated opening of auction house Phillips’ new Asia headquarters at the WKCDA Tower in Hong Kong’s West Kowloon Cultural District earlier this month.
In a city charged with an almost neurotic intensity to make up for lost time—Hong Kong even went ahead with its landmark Credit Suisse three-day investment conference last week amid the bank’s sale to UBS, Art Basel’s main sponsor—Phillips’ opening stood out amid the various exhibitions, press conferences, parties, and dinners, organized during the past week.
Spanning over 52,000 square feet across six floors, Phillips is supposedly the first international auction house to establish a purpose-built saleroom and gallery space in the city. This is part of the company’s plans “to shake up the sale calendar,” Phillips CEO Stephen Brooks told ARTnews.
Alongside spring and fall marquee auctions, the house will begin staging more sales in Hong Kong, including some mid-season auctions. There will also be slew of program throughout the year, including a selling exhibition in late April dedicated to Yayoi Kusama and Chiharu Shiota, as well as a non-selling exhibition collaborating with Asia-based collectors to display their works.
Highly reflective of the position auction houses occupy in today’s art eco-system, Phillips is located right next to M+ Museum, another recent and widely anticipated addition to Hong Kong’s cultural landscape that also happens to be hosting Kusama’s first retrospective in greater China. (The new headquarters are located in a building designed by famed Swiss architectural firm Herzog & de Meuron, which also worked on M+ Museum.)
These developments come just eight years after Phillips held its first auctions in Hong Kong; by comparison Sotheby’s is currently celebrating 50 years in the special administrative region. “In that short amount of time, there has been a true transformation of the playing field. It now comes as no surprise that the highest value lot in our long history—a masterwork by Jean-Michel Basquiat—came from the collection of Yusaku Maezawa and was sold to another collector based in Asia for $85 million,” Brooks said.
The auction house, which is owned by Russia’s Mercury Group and faced buyout rumors last year, reported in December that 34 percent of its auction sales in 2022 came from clients based in Asia. Additionally, Asian clients also accounted for significant activity in the company’s overseas sales, garnering over 30 percent of transactional activity in their New York sales and over 20 percent in their Geneva sales last year.
However, the company’s annual statement in December revealed that Hong Kong’s auction and private sales of art and luxury items dropped from HKD $2.1 billion (around $270 million) in 2021 to HK $1.3 billion ($167 million) in 2022, which was consistent with a contraction in sales across all major auction houses in the Asia Pacific region last year.
For now, auction houses remain unfazed in their efforts to double down on Asia, but the question remains: with the rise of aspiring art capitals across the region, why Hong Kong?
Most industry insiders agree that Hong Kong has a more flexible market compared with other Asian cities, in terms of its free-trade status, comprehensive legal system with low corruption, freeport policies, low taxes, and long-established and reliable infrastructure, as well as strategic and convenient location in the center of Asia.
Local art collector Alan Lo said, “Hong Kong may no longer be the New York of Asia, but it is definitely becoming the Monaco of Asia, where people come to spend money on building art collections, super yachts, Michelin star meals, crazy expensive Burgundy wines, and mansions on the Peak.”
He continued, “In terms of where people put their assets that’s a different story. Singapore is looking very favorable, especially [in comparison] to mainland Chinese, owing to a very similar lifestyle as Hong Kong and also because Mandarin Chinese is spoken as one of the mother tongues.”
When asked about whether the auction house is applying for licenses to conduct sales in other parts of Asia Pacific, Jonathan Crockett, Phillips’s Asia chairman, responded, “We are committed to Hong Kong as the leading international arts hub in Asia, and currently have no intention of holding auctions elsewhere in the region. That said, technology has enabled us to host auctions and engage with collectors in multiple locations in a way that was not possible before.”
Ultimately, it seems that Hong Kong’s positioning as a gateway to the collectors in mainland China is the city’s primary attraction for global auction houses like Phillips.
Veteran Swiss auctioneer and art dealer Simon de Pury, who was the house’s chairman from 2001 to 2012, observed, “Phillips’ collaboration with Poly, the leading Chinese auction company, has significantly contributed to their development and greatly enhanced their access to China’s pool of buyers. The expansion of Phillips in Hong Kong therefore makes a lot of sense.”
In spite of the successful partnership, Phillips has since teamed up with a different Chinese auction house, Yongle, for its 2022 sales in Hong Kong and Beijing. However, de Pury speculated that, from a strategic point of view, the ultimate development would be a merger between Phillips and Poly, which would turbocharge each of these two companies.
“It would seal the transformation of the global auction business from a duopoly to one dominated by three players,” de Pury said. “It will create a healthy emulation and competition which will ultimately not only benefit each actor but also strengthen further the importance of Hong Kong as a key auction center.”