_Why these Singaporeans collect art, watches and wine

Last year, despite major auction houses achieving record-breaking sales, luxury investments dipped into negative territory as froth came off markets. This is based on the Knight Frank Luxury Investment Index(KFLII), which was released last week as part of the real estate consultancy’s annual Wealth Report.

The index, which tracks the performance of 10 popular passion investments, shows that art was the best-performing luxury asset class, with prices rising 11 per cent in 2023.

It was also the only one of Knight Frank’s 10 index constituents to hit double-digit growth last year, with the KFLII down 1 percent on average.

Together with art, jewellery (8 per cent), watches (5 per cent), coins (4 per cent) and colour diamonds (2 per cent) made up the top five best-performing assets. Rare whisky bottles (minus 9 per cent) were the worst performers.

Over in Singapore, Knight Frank’s poll showed that this year, the ultra-rich are willing to invest the most in art, watches and wine– and in that order. Art was the top choice for 58 per cent of respondents, moving up the rung from fourth position the year before. Watches garnered 49 per cent of the vote, and wine 35 per cent.

Going by the KFLII, art grew by a cumulative 105 per cent over the last 10 years, or about 11 per cent in 2023. Watches returned a cumulative 138 per cent, or a 5 per cent gain last year, while wine increased 146 per cent over the last decade, though its value grew only by 1 per cent in 2023.

Knight Frank noted that these investments of passion outpaced inflation over the long term, given that Singapore’s Consumer Price Index rose 14.2 per cent from 2014 to 2023. Nicholas Keong, head of residential and private office at Knight Frank Singapore, says: “As Singapore’s wealth population grows with steady economic success, more individuals will turn towards investing in these collectible investments.”

But while collecting can potentially be financially rewarding, three Singaporean collectors tell us the real reasons why they pursue their passions.

Sharad Desai, wine collector

“I absolutely love wine,” declares Sharad Desai, who has been buying wines for 24 years. “And I’ve never sold a bottle.”

The financial services executive started making purchases around the year 2000,when he was living in London and travelling to various winemaking regions of France, including Champagne, Burgundy, and the Loire and Rhone valleys.

“I fell in love with regions of the world with beautiful vineyards, and overtime, my appreciation of the wines from each of these regions was enhanced.”

He does not see collecting as heading towards a “destination”, but as are presentation of the wines he likes. Besides, he says, wine is a “fantastic social equaliser” that has brought him friends who share his passion.

Over the years, he has discovered many wonderful vineyards and winemakers. In the process, his collection has grown to some 50,000 bottles. They are stored here in Singapore, as well as in London, California and Hong Kong. He moves them here when they are ready to drink.

His preference tends towards lower-alcohol wines, which typically come from cooler places.

“Wine-drinking is really for the aromas, the flavours,” he points out. “It’s based on the kind of food you’re eating, who you’re drinking wine with, what time of day or night it is, where you are. So, the journey has been discovering new regions that produce wines that are similar to my taste profile.”

In the last 10 years, and specifically during the pandemic when people were splurging on wine, there was a huge appreciation in prices. But these have since levelled off. “I tend to stay away from markets that are already on fire,” Desai says.

And while wine may be a good investment on paper, he cautions that it is a perishable commodity that is not easy to trade, with high hidden costs involved.

For instance, to buy from a UK-based seller, one would have to pay not only for the wine itself, but also the costs of getting it out of storage, shipping it halfway across the world, bringing it through Singapore’s customs, and then getting it delivered to one’s home.

Secondly, the bid-offer spread – the difference between the buying and selling prices – can be quite wide.

“It can be as much as 30 per cent of the price of the wine,” Desai says. “So if the paper value of a wine is S$100, and I want to sell it, the next buyer may be willing to pay me only S$70.That is something you need to think about.”

Similarly, while people talk about selling wines via auctions, the commissions charged by auctioneers can be as high as 30 per cent.

The truth is, buyers are always trying to identify the next star, but “there’s a tonne of wine” made around the world, with only a very small percentage that actually appreciates every year.

“For anyone who’s collecting for investment purposes, it’s quite a difficult task to try and figure out what to buy, because the ones that do appreciate the most are already very, very expensive,” Desai says.

Ultimately, what is wonderful about wine is that it can be enjoyed.

“It’s a great idea to hold it because you will still benefit,” he reasons. “You’ll have many good bottles to choose from whenever you want something nice to drink!”

Gerald Lum, watch collector

An affliction of passion is what Gerald Lum calls his 13-year watch collecting habit.

“Each time you get a piece, you think: ‘This will be the final one’ but it never is,” says the brand, marketing and communications director, laughing. “You just keep adding and adding.”

His interest in watches began about 20 years ago, when he was working in the airline industry and noticed that pilots had “fancy” watches. Back then, Tag Heuer and Breitling were the cool watch brands in the industry.

“Those fancy things on the wrist? I would like one too,” he told himself.

While he will not divulge how many watches he has today, he cites several as the highlights of his collection.

“Watches are about stories for me,” he says. “And also, of course, their collectability and artistic value.”

He considers his first “real” watch to be the IWC Schaffhausen Pilot. The watch is special to him since it was what started him on his watch-collecting journey. Back then, the model wasn’t as well known. Today, he says it makes for a discreet watch suitable for travelling.

Among his collection of Rolexes, his first is the GMT-Master II with a black ceramic bezel, bought about 10 years ago “when you could walk into a shop and buy any Rolex you want off the shelf”. This isn’t possible today due to overwhelming demand and tight control over who gets to purchase them.

“This watch tells a story because it put me on this very painful Rolex journey,” he says. “Painful because there are pieces I can’t get.”

The next Rolex highlight is the green Submariner “Hulk”, which has become very collectible because it is no longer being produced.

Lum happened to be walking past a watch boutique in Capri, Italy, about a decade ago when he noticed the Hulk in the window.

Not only was it available for sale, its green colour made it unpopular then and the sales staff offered it to him at a discount.

Another key Rolex for him is the Sky-Dweller, the brand’s most complex watch. He managed to buy it in Strasbourg after failing to acquire any Rolexes in London and Paris when holidaying there after the Covid-19 pandemic. Borders had just reopened then and stocks just weren’t available.

His most-prized Rolex, however, is the coveted Cosmograph Daytona with a black dial. And he is looking to add the version with a white dial, known as the “Panda”, to his collection.

Apart from Rolexes, he also goes for “luxury micro brands” such as H Moser & Cie, which produces only 1,500 time pieces a year. He also has a beautiful watch from Vacheron Constantin’s Historiques line. Founded in 1755, the brand is the oldest in uninterrupted watch making activity. But the “holy grail” in his collection is the Patek Philippe Aquanaut, one of the brand’s most in-demand watches. He had been eyeing it for several years and finally took the plunge when he was offered a piece after being on a wait list for nearly two years.

Like other luxury goods, watches shot up in price during the pandemic when people couldn’t spend on other pursuits but had time to read up on watches and go “a bit crazy”.

“Most of the so-called collectors are no longer collectors,” says Lum. “They were buying just so they could flip them immediately for a lot of money. Many who bought at the peak are now suffering because prices have dropped. The hype has died down.”

And that, he says, is not a bad thing for genuine collectors.

“I think watch-collecting should be about the pleasure of using them,” says Lum, who does not sell his timepieces. “They are really pieces of art on your wrist.”

Linda Neo, art collector

Linda Neo is a familiar name in art circles, and she is clearly more than just an art collector. She is also a strong art advocate, agreeing to interviews to help promote Singapore art, chairing Oh! Open House – an independent arts organisation – and nudging fellow collectors to show their works to help generate more buzz for the local scene.

“When we started collecting, it was never about looking at (art) as an investment tool or alternative asset,” says the financial broker. “It’s really a hobby that turned into a passion.”

It began quite simply enough – her husband, Albert Lim, loves art and the couple were spending a lot of time in museums while on their travels overseas.

“I made the effort to join him so that as we grew older, we’d share a common interest,” explains Neo, who now frequently attends overseas art tours, fairs and events with Lim.

“With art also comes good food and good wine. And you get to meet so many like-minded people.”

Before they knew it, 20 years had passed.

The couple began with acquiring Western and Renaissance art but have since shifted their focus to contemporary South-east Asian art – especially Singapore works.

In 2014, they opened the private Primz Gallery to display their burgeoning collection, before eventually also granting the public access to it.

Lim, who is retired but involved in his own business, even did a masters in art history because of his passion.

“I think it’s important that we understand art history in South-east Asia and also around the world, so we can collect in a more intellectual way,” says Neo.

She has seen the local art scene evolve. Some 10 years ago, it was difficult to get information about fine art. But today, galleries are showing, and there are independent curators and an entire ecosystem that supports art. These range from logistics experts, conservators, framers and insurers to security personnel, catalogue copywriters and publishers.

“Many people think it’s very easy to put up an exhibition, but it’s not,” she says.

“There’s a whole host of things that you need to do just to stage a show. You spend, say, half an hour walking around for a look. But some of these shows take one to two years before they can be put together. And to be able to do that, we’ve really built the necessary talent over the past 10 years or so.”

She is heartened that interest in art-collecting has grown exponentially. There are now more scholarships, research work, training programmes in art management and public exposure. She says luxury brands such as Louis Vuitton, Christian Dior, Valentino and Cartier have also been sponsoring art events, generating plenty of interest among young people.

While neighbouring countries are also trying to build their presence in art, Singapore has “done a very good job” concentrating on a specific area.

“Art is so wide and you’ve got to be really specific,” she explains. “Singapore has intentionally positioned itself to look at South-east Asian art and build a very strong collection. So that has been, really, the highlight of our journey as well.”

For newbies, she encourages them to “train their eyes” by going to art museums and attending the many art fairs locally and in the region.

“When you collect art, you also learn about the history of a country and its culture,” she says, adding that the National Gallery, Singapore Art Museum (SAM), Art Science Museum, Gillman Barracks and SAM at Tanjong Pagar Distripark are just some of the places one should go. “Art-collecting is a hobby that my husband and I really enjoy,” says the grandmother of four. “And it is something we can really spend time together on now that we are empty-nesters.”

This article first appeared in The Business Times