The Global Dynamics of Art Markets: Beyond City Boundaries

Frieze London. Via Frieze

London remains the preeminent hub of the European art market. It consistently upholds its position as the epicenter of the art world, eclipsing the attention garnered by Paris. External factors, such as Brexit and the global pandemic, momentarily raised questions about whether London would relinquish its prominence to Paris. However, subsequent analysis has dispelled such conjecture as unsubstantiated. In the sphere of art commodification, London continues to assert itself as the second-most influential city globally, trailing only behind New York.

The United Kingdom continues to exert its dominance over the European art market, notwithstanding the current limelight on Paris. In essence, some argue that juxtaposing the significance of different cities in this context may have become less meaningful. Art dealer Thaddaeus Ropac emphasized this point when he conveyed to the media, "One must bear in mind that in cities like London, New York, or Hong Kong, the primary art market is profoundly international, driven primarily by the interests of collectors."

Ropac further elucidated that even the most affluent art buyers encounter challenges when seeking entry into the primary market. To surmount the lengthy waiting lists associated with certain artists, they must establish collaborative relationships with both dealers and artists. "Due to this international character, the location of an exhibition or a collector's residence often becomes less consequential. The city in which an exhibition is held may not necessarily mirror the market dynamics within it," he expounded.

The United Kingdom continues to exert its dominance over the European art market, notwithstanding the current limelight on Paris. In essence, some argue that juxtaposing the significance of different cities in this context may have become less meaningful. Art dealer Thaddaeus Ropac emphasized this point when he conveyed to the media, "One must bear in mind that in cities like London, New York, or Hong Kong, the primary art market is profoundly international, driven primarily by the interests of collectors."

Ropac further elucidated that even the most affluent art buyers encounter challenges when seeking entry into the primary market. To surmount the lengthy waiting lists associated with certain artists, they must establish collaborative relationships with both dealers and artists. "Due to this international character, the location of an exhibition or a collector's residence often becomes less consequential. The city in which an exhibition is held may not necessarily mirror the market dynamics within it," he expounded.

Challenges are evident in London, particularly for older and well-established galleries, primarily due to the increased cost of conducting business following the Brexit transition. Dealer Phillida Reid, who operates her eponymous gallery in Bloomsbury, a vibrant neighborhood in London's West End adjacent to the British Museum, shared her perspective. Currently, her gallery hosts an exhibition titled "The Life Cycle of a Flea," featuring new works by Prem Sahib. Bloomsbury's Herald Street has seen a surge in the establishment of new galleries and entrepreneurial dealers, injecting a palpable sense of positivity into the city's art scene. Among the newly established galleries are Union Pacific, Brunette Coleman, and aSquire. Reid herself opened her gallery in the vicinity last year, and Hot Wheels Athens, a well-established gallery, is slated to open its doors in November.

The scene at the 2023 edition of Frieze London 2023.

These new galleries are well-adapted to the post-Covid, post-Brexit landscape, as they have never experienced anything to the contrary. In contrast, older galleries have grappled with the complexities of these new regulations, according to dealers. In a January report, the House of Lords Communications Committee issued a warning about governmental complacency regarding the challenges confronting the creative sector, suggesting the need for adjustments to tax policies to alleviate the burdens on small and medium enterprises.

This transformed environment has necessitated creative solutions. Stuart Shave, from London's Modern Art gallery, is preparing to establish a presence in Paris and other locations, both to expand the gallery's European footprint and to mitigate the challenges posed by the pandemic and Brexit. Simultaneously, several art professionals, including Robbie Fitzpatrick, formerly of Freedman Fitzpatrick in Los Angeles, Chicago-based dealer Mariane Ibrahim, Italian galleries Massimo De Carlo and Galleria Continua, and former Hauser Asia director Vanessa Guo (in collaboration with Jean-Mathieu Martini), have opened spaces in Paris in recent years. The proliferation of exhibition spaces in Paris led The New York Times Style Magazine to note in 2022 that the city was finally rekindling the "energy and excitement" reminiscent of its illustrious 1920s heyday.

However, the resurgence of Paris has not yet translated into a significant market share. According to this year's Art Basel/UBS Art Market Report, the UK's market share has slightly increased from 2022, standing at 16 percent, compared to France's 8 percent.

Thaddaeus Ropac remarked, "The Parisian renaissance is a positive development, but it does not automatically impact London. Paris may be more in vogue this season, but London still boasts a critical mass of institutions, museums, and artists who have no intention of relocating."

On the other hand, the UK art market witnessed a decline until 2020, recording only $456 million in revenue that year, the lowest since 2009. However, it has rebounded since, with a notable 10 percent growth in revenue in 2022 compared to 2021. This resurgence was buoyed by strong auction sales, including the remarkable sale of Magritte's "L'Empire des Lumières" (1961) for $79.7 million at Sotheby's, marking a new record for the artist's work.

Drew Watson, Head of Art Services at Bank of America Private Bank, sees Paris as a burgeoning market, New York maintaining its top position and experiencing growth, but anticipates that London will remain relatively stable. This projection is attributed to the downward trajectory of the pound sterling and the prevailing high inflation rate in the city.