_Watches, Wine and Rare Whisky takes top positions in Knight Frank Luxury Investment Index in SG

The Knight Frank Luxury Investment Index (KFLII) which tracks a weighted basket of 10 luxury collectibles, rose by 7% in the 12 months to the end of June 2023.

August 10, 2023

Singapore, 8 August 2023 – The Knight Frank Luxury Investment Index (KFLII) which tracks a weighted basket of 10 luxury collectibles, rose by 7% in the 12 months to the end of June 2023. This was a credible performance compared with the FTSE 100 index of equities, which rose by 5%; and gold which was up in value by just 1% over the same period.

It was, however, the weakest annual performance by KFLII since Q2 2021, proving that even tangible assets are not immune to market uncertainty. Closer to home, watches (59%), wine (45%) and rare whisky (45%) are preferred among the ultra-rich in Singapore. Ultra-high net worth individuals in the APAC region are most interested in purchasing art (52%), watches (48%) and wine (45%).

Nicholas Keong (龚顺伟), Head, Residential and Private Office, Knight Frank Singapore (高级董事兼主管, 高端住宅与私人公室, 莱坊) opined, “Global economic uncertainty and higher interest rates have impacted investment-grade luxury collectibles. New collectors should focus on what makes them happy – perhaps that is more significant now that value appreciation is not guaranteed in these asset classes.”

Art tops the KFLII with 12-month growth of 30%. Sebastien Duthy, CEO, Art Market Research (AMR) shared, “The auction season’s spring sales are the first measure of market confidence and recent results suggest growth is already starting to slow.”

Watches (10%) and jewellery (10%) came in second and third, reflecting consumers’ willingness to spend on personal luxury items. Coins (8%) came in fourth, followed by the KFLII (7%) in the fifth place. However, it is the slowdown in the wine (5%) and classic car (5%) markets, both in sixth and seventh place respectively, where double-digit rises that have often underpinned the index’s performance, that have tempered growth.

Despite the car market being up 5% on an annual basis, it has fallen 7% so far this year. Dietrich Hatlapa, Founder, Historic Automobile Group International (HAGI) added, “The performance of classic cars has been mixed. After a strong performance in 2022 when the value of the most investable classic cars rose by 25%, this year has seen the market slip into reverse gear due to macro-economic factors.”

Coloured diamonds (4%) enjoyed a rise in interest and came in at eighth place. Handbags (1%), Furniture (0%) and Rare whisky (-4%) completed the rankings. Rare whisky, the strongest 10-year performer in the KFLII, is the only asset class to see a negative annual performance. Andy Simpson of industry consultant Simpson Reserved said, “Bottles of rare whisky have had a far more sedate time from a performance perspective over the past three years. Higher value (over £5,000 or approximately SGD8,520) bottles have re-traced recently due to a myriad of geo-political, social and economic reasons. Certain brands have still performed well, while the market leader (from a sheer volume of market perspective), Macallan, has seen particularly punishing losses with its index re-tracing almost 12% over the past twelve months.”

Knight Frank’s Luxury Investment Index, Q2 2023

The KFLII provides further in-depth analysis including:

Changing social attitudes that are influencing luxury investment markets (pages 18, 24 and 44)
- Female artists have seen some of the strongest price growth in the art market over recent years
- The demand for electric supercar conversions is also on the rise as a younger generation of wealthy car fanatics eschew petrol power
There is an inextricable synergy between residential real estate and lux investments (page 40)
- High-net-worth-individual collections can shape their homes, but equally their homes can shape their collections
- Developers are also increasingly factoring the collecting habits of potential buyers into their collections
NFTS are down but not out (page 12)
- The value of Covid-era high-profile NFTs has slumped, but digital art works considered to have the right provenance are still selling for large amounts

Read the full report here.

_Watches, Wine and Rare Whisky takes top positions in Knight Frank Luxury Investment Index in SG

Related Reading