Do artworks by South-east Asian artists make smart investments?

The first thing Maddie* (not her real name) bought for her new apartment was an ink painting by Singapore Nanyang artist Tan Chin Boon. The 35cm by 40cm artwork, depicting a pair of goldfish swimming in a pond, caught her eye while she was casually browsing at Artualize, a boutique art gallery located at High Street Centre.

“I like how the derpy expression of the goldfish reminds me of the quirky panda sculptures at Haw Par Villa. It really speaks to me,” shares the media professional, who is in her 30s.

While Maddie had previously bought lithographs by local creatives, this was her first purchase of a work by an established artist of Chin Boon’s calibre. The fact that the 71-year-old won the Gold Award in the Established Artist category of the 2024 UOB Painting of the Year (Singapore) influenced her decision to splurge $500 on the painting on a whim.

“Many Nanyang artists, who are technically skilled, are ageing out. Soon, it’ll be increasingly difficult to find Chinese ink paintings of that quality. Chin Boon also has a distinctive, contemporary style that I appreciate,” she adds.

Low Sok Leng, the founder of Artualize, notes a growing interest in supporting local artists as younger collectors like Maddie “look beyond merely seeking returns”. A former accountant and daughter of second generation Nanyang artist, the late Low Hai Hong, she started the gallery when her father passed away in 2020, leaving behind a thousand paintings – his life’s work.

Sok Leng set up Artualize to manage the legacy of her respected oil painter father and to raise the profile of local artists, while making Singapore art more accessible.

“Collectors are not always driven by returns; some buy because they like the works, some buy because they like the artist, and some buy because they support a certain cause,” she states.

There have also been demographic shifts, which impact how art lovers navigate their investment journey. More young people are interested in art as an alternative investment.

“The younger generation are more educated with investment tools, and are hence open to trying alternative investments such as art,” says Sok Leng.

Talenia Phua Gajardo – director and founder of The Artling, which curates and sells artworks to both retail and commercial clients – also observes a growing interest in South-east Asian (SEA) art. This creates opportunities for local and regional investments, she notes.

“Artists like Korakrit Arunanondchai, Pacita Abad, Yee I-Lann and Pinaree Sanpitak are some good names to know, and are highly sought after for their innovative storytelling, use of materials and strong aesthetic appeal,” she says.

For instance, in September last year, contemporary Filipino artist Ronald Ventura’s painting “State of Bloom” sold for HK$36.6 million (about $6.4 million), including fees, at Christie’s Hong Kong headquarters.

“Their works are very personal, yet in some ways also reflect SEA’s dynamic cultural landscapes, making them attractive to both private and institutional collectors,” says Talenia.

A diversifying market

Despite the growing interest among millennials, there remains a paradox.

On one hand, this passion investment category surged to the top of the Knight Frank Luxury Investment Index for 2023, from fourth place the previous year. According to Knight Frank Singapore, a majority of 58 per cent of Singapore respondents ranked art as the top investment of passion to be sought after in 2024.

The art scene here has also been garnering interest, with events such as Art SG drawing a record attendance of over 45,000 visitors last year. However, high-net-worth individuals allocated less of their personal wealth to art, with the average allocation down to 15 per cent in 2024 from 24 per cent in 2022, according to The Art Basel and UBS Survey of Global Collecting 2024.

Of this group, it was the millennials who significantly decreased their average spending on art by as much as 50 per cent in 2023, said the report, explaining that the 2022 levels of average spending were driven by a small number of very high spenders.

These mixed factors bring a new wave of art collectors and art investment services, evident by the growing popularity of events that lower the barrier to entry such as the Affordable Art Fair, which recorded $5.3 million sales and 22,000 visitors across three days in 2024.

In comparison, its first run here in 2010 drew 9,500 art lovers and $1.75 million in sales. The art buying and selling scene has also become more decentralised.

“There are signs of collectors pursuing deals with private advisors and dealers more directly, instead of from the major auction houses,” notes Chingyi Chua, co-founder of Art Again, an online marketplace connecting buyers and sellers of preowned art.

The art broker and gallerist cites the Art Basel and UBS Survey of Global Collecting 2024, which reported that major auction houses saw a collective 26 per cent reduction in sales in the first six months of 2024.

According to her, this shows a possible shift in attention away from big-ticket artworks and auctions, and into the homes of private collectors and private sales and dealings.

Making art affordable

Young art investors are often held back by the perception that a significant capital investment is required, and a lack of sufficient knowledge about this highly specialised market.

Aiming to lower this key barrier to entry, The Artling offers pieces from US$500 (about $683) in order to democratise art collecting, especially for first-time buyers. The annual Affordable Art Fair – true to its name – has three-quarters of its artworks priced under $7,500, and the remaining pieces capped at $15,000.

“Traditionally, art investments only made sense at a significant scale – often requiring multi-million-dollar purchases held over at least a generation to yield returns. It’s no surprise that art appears out of reach to many,” says Chingyi.

One such example was back in 1974, when the British Rail Pension Fund decided to buy art as an inflation hedge during the financial crisis. These 2,506 artworks it acquired for 41 million pounds achieved net proceeds of 170 million pounds (about $286 million) when the final item was sold in 2003 – however, less than 10 per cent of these artworks accounted for over 75 per cent of the total value.

This spurred her to create secondary marketplace Art Again in 2023, in order to plug a much-needed gap. There, carefully curated pre-loved pieces start from below $1,000, more affordable than those in the primary market.

It is also a win-win situation for sellers, who may need to offload pieces for personal reasons, but need only pay a simple 15 per cent commission on the sale price instead of high fees to auction houses. For the latter, costs include a seller’s fee, taxes, shipping, and even an additional commission on pieces that do well.

“Art investors generally argue that it takes a generation (approximately 30 years) to see a return based on their observations of price trends. We’re hoping that by creating a highly effective marketplace, you’ll be able to acquire pieces that have come back onto the market just before their value is set to rise,” shares Chingyi.

Another novel way to get around the illiquid nature of physical art is through fractionalised investing. Sok Leng launched We Are Art Collectors (WAAC), Singapore’s first fractional art ownership programme for local art, in January this year. It has a one-time lifetime membership fee of $1,000. At WAAC, the ownership of a physical painting is divided into lots of $1,000 each.

This increases accessibility for new investors, and also helps seasoned art collectors diversify. A WAAC lot owner can sell her lot to other WAAC members to realise her return, or in case she has an urgent need for liquidity. An artist or collector can sell part of their ownership to WAAC for cash, and retain some ownership for future upside. Each painting in the care of WAAC is maintained by professionals and displayed for public enjoyment.

Fractionalised art ownership has emerged in the digital world, with US-based Artemundi collaborating with Sygnum Bank to pioneer art tokenisation in 2021 with Picasso’s “Fillette au beret” painting. Since then, Artemundi has offered 10 more masterpieces for fractional art ownership following growing demand in this kind of investment vehicle, says head of business development and private sales, Natascha Reihl.

Artemundi focuses on masters from the 20th century that have proven value through time, akin to blue-chip investments that typically have lower risk and dependable returns. Its fractional art ownership offerings start from 50 euros (around $71) per fraction.

However, tokenisation may not be so readily acceptable to Singapore investors, due to differing regulations here for such digital assets. Sygnum Bank, which has headquarters both here and in Switzerland, has not embarked on a similar project since.

“That audience [for us] is still quite small,” notes Max Stuedlein, head of strategic digital asset solutions. “There is just much more demand for more crypto-native pieces of art. The market’s much larger, and there are less onboarding steps you might have to go through as a customer.”

For instance, those who bought the Cryptopunks or the Bored Ape Yacht Club non-fungible tokens (NFTs) could get returns within days, depending on the hype around the piece of digital art, he shares.

“Because it’s purely digital, that’s when you get all of the benefits of tokenisation regarding factors such as the efficiency of transactions. However, a traditional artwork that you’ve tokenised will just behave like a traditional piece of art,” he adds.

Is art collecting a truly profitable hobby?

Like any other investment, collecting art for profit has its risks. Says Sok Leng: “Whether as a hobby or investment, art collecting is not always profitable. Risks are high because art is very subjective. Tastes may change and new trends emerge, so nothing is guaranteed. While art collecting is not truly profitable, it is definitely enjoyable.”

For new art investors and collectors, there is no hard and fast rule on how to start.

“Read and see as much as you can online and in person, and visit galleries, museums, and art fairs to develop a more learned eye. Look for works by artists that stand the test of time and hold artistic, historic, and monetary value – like those you’ll see in collections of public institutions,” advises Chingyi.

“The medium matters (oil paintings are always priced more than paper works by the same artist). You should also take note of the time of production, patronage, and affiliations with certain schools or other famous artists. If you find artworks by such artists, have the capital for it, and like the work, I’d go for it.”

Talenia stresses the importance of buying what resonates instead: “For beginners, focus on research and start small with limited edition prints or emerging artists. Read, read and read more! You can also analyse an artist’s career trajectory, exhibition history, and market performance.

“Don’t buy art just for the sake of investment. The notion of ‘art investment’ is about more than financial returns – it’s about preserving culture, fostering creativity and enriching lives.”

PHOTOGRAPHY ATHIRAH ANNISSA
ART DIRECTION ADELINE ENG
COORDINATION CHELSIA TAN
HAIR AUNG APICHAI/ARTISTRY, USING KEVIN MURPHY
MAKEUP BENEDICT CHOO, USING SHISEIDO