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Arabian Business
32 minutes ago
- Arabian Business
Art as an asset: How Middle East investors are redefining the global market
For a growing number of investors, art is no longer just a cultural passion but an alternative asset class, increasingly factored into wealth portfolios. In the Middle East, with a growing number of ultra-high-net-worth individuals (UHNWIs) and family offices expanding allocations to alternative investments, art is emerging as a serious play, both for its diversification potential and for its geopolitical soft power. The global art market posted sales of $65 billion in 2023, up 4 per cent from 2022, according to the Art Basel & UBS Art Market Report 2024. The US accounted for 42 per cent of sales, China 19 per cent, and the UK 17 per cent. Although the Middle East represents a small share of total transactions by volume, regional buyers have become more prominent in high-value segments, especially for modern and contemporary works. Art can serve as a hedge in periods of inflation or equity market volatility. Research by Sotheby 's shows that between 1950 and 2021 the Mei Moses All Art Index returned an average of 8.5 per cent annually, with contemporary art delivering higher returns but also greater volatility. Auction houses have reported strong demand for trophy works: in 2023, Sotheby's sold Gustav Klimt's Lady with a Fan for $108.4 million – the highest price achieved at auction that year. Middle East buying power Over the past 15 years, Middle Eastern collectors and institutions have been among the most active buyers at the top end of the market. Qatar Museums reportedly paid over $250 million for Cézanne's The Card Players between 2011-2012, still among the highest prices ever paid for a painting. The Gulf state has also amassed works by Rothko, Bacon, and Richter. The UAE has also positioned itself as a regional art hub. Dubai's annual Art Dubai fair has grown into a key fixture on the global calendar, attracting galleries from 40+ countries and collectors from across Asia, Europe, and the US. In a previous interview with Arabian Business, Benedetta Ghione, Executive Director of Art Dubai, said: 'Since its founding in 2008, Art Dubai has evolved into a key institution, serving as a catalyst and important driver of Dubai's creative economy.' 'The city has truly emerged as a capital of the Global South, particularly within the creative industries,' Ghione explained. Louvre Abu Dhabi, which opened in 2017, has acquired significant pieces from European and Islamic art traditions, often through high-profile auctions. In Saudi Arabia, cultural spending has accelerated under Vision 2030. The Ministry of Culture launched the Diriyah Contemporary Art Biennale in 2021, and the Royal Commission for AlUla has commissioned large-scale installations and permanent collections to support the area's development as a cultural tourism destination. Investment vehicles and risks Institutional investors and private banks are also starting to formalise art investment. Platforms such as Masterworks allow fractional ownership of blue-chip works, lowering entry barriers. Major banks, including UBS, JPMorgan Private Bank, and Citi, have dedicated art advisory and lending desks that offer valuations, sales support, and loans against art assets, treating them as collateral. However, art remains an illiquid and opaque market. Prices can be highly sensitive to trends and taste, provenance issues can damage value, and transaction costs — including buyers' premiums, insurance, and storage — can erode returns. Unlike publicly traded securities, valuations are subjective and disclosures are limited. In the Middle East, art investments are also influenced by regulatory and tax environments. The UAE has no capital gains tax, making it attractive for art transactions. Free zones such as Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) have developed infrastructure to facilitate high-value sales and art-related legal structures, including trusts. In Saudi Arabia, import duties and cultural property laws are evolving, and the government has moved to strengthen intellectual property and heritage protections. Global UHNWIs allocated about 1.6 per cent of their wealth to art in 2023, according to Knight Frank's Wealth Report, with allocations expected to rise. In the Middle East, this figure is slightly higher, as cultural and prestige considerations often accompany investment objectives. The increasing presence of regional collectors at international auctions, coupled with large-scale state-backed initiatives to build cultural capital, suggests the Middle East's role in the global art market will continue to expand both as a buyer of last resort for headline works and as a growing hub for transactions, exhibitions, and storage.
Arabian Business
32 minutes ago
- Arabian Business
UAE and Azerbaijan sign CEPA deal to boost $2.4bn trade ties
The UAE and Azerbaijan have signed a landmark Comprehensive Economic Partnership Agreement (CEPA) aimed at accelerating joint economic growth, diversification, and investment, marking a major milestone in the deepening strategic relationship between the two nations. The agreement was signed in the presence of UAE President Sheikh Mohamed bin Zayed Al Nahyan and President Ilham Aliyev of the Republic of Azerbaijan. Sheikh Mohamed described the deal as a 'significant milestone' that reflects the shared vision of both countries to build a resilient, knowledge-based, and innovation-driven economy. UAE- Azerbaijan trade deal Signed by Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of Foreign Trade, and Mikayil Jabbarov, Minister of Economy of Azerbaijan, the CEPA will: Enhance investment flows across key sectors including renewable energy, tourism, logistics, and construction Strengthen private sector collaboration and global supply chains Empower SMEs and entrepreneurs to expand into new markets The United Arab Emirates is Azerbaijan's leading Arab investor, with total investments exceeding $1bn. In 2024, bilateral non-oil trade surged by 43 per cent year-on-year, reaching $2.4bn, reinforcing the country's position as one of Azerbaijan's top trading partners. The agreement is part of the UAE's ambitious CEPA programme, which aims to expand non-oil foreign trade to $1.1tn by 2031. In 2024, the UAE's non-oil trade hit a record $816bn, marking a 14.6 per cent year-on-year increase. To date, the United Arab Emirates has signed 27 CEPA agreements with global markets, giving businesses enhanced access to economies representing more than a quarter of the world's population.
Emirates 24/7
35 minutes ago
- Emirates 24/7
Tahnoon bin Zayed chairs ADQ Board of Directors meeting
H.H. Sheikh Tahnoon bin Zayed Al Nahyan, Deputy Ruler of Abu Dhabi and Member of the Supreme Council for Financial and Economic Affairs (SCFEA), has chaired the board meeting of ADQ. Sheikh Tahnoon commended ADQ's continued efforts to strengthen the foundations of economic resilience and sustainable development, in line with the wise vision of President His Highness Sheikh Mohamed bin Zayed Al Nahyan, while also recognising ADQ's role in supporting the country's digital transformation and economic diversification through investments and strategic partnerships across global markets. During the meeting, the board reviewed ADQ's financial performance for Q1 2025, which remains on a strong growth trajectory. The board was also presented with a comprehensive summary of key transactions from the last quarter, including ADQ's acquisition of Aramex through a successful voluntary tender offer, subject to successful completion of the transaction. Aramex will form an integral part of ADQ's Transport and Logistics cluster, offering end-to-end supply chain integration and management while complementing existing investments within the cluster. The board was also briefed on the strategic significance of the US$25 billion investment partnership with Energy Capital Partners, the largest private owner of power generation and renewables in the US, which aims to develop new power generation infrastructure across the US. These projects are intended to meet the growing power demands of data centres driven by the proliferation of AI, while supporting the expansion of the country's broader energy infrastructure. Other notable milestones included the launch of Gridora, a joint venture established in April by ADQ, IHC, and Modon Holding to drive infrastructure development through private and public-private partnerships. Operating under Modon Holding, Gridora will collaborate with specialist partners and capital providers to deliver large-scale, high-impact infrastructure projects. During the same month, ADQ, IHC, and First Abu Dhabi Bank announced plans to launch a dirham-backed stablecoin, fully regulated by the UAE Central Bank. The stablecoin aims to simplify payments and business transactions locally and globally, reinforcing the UAE's position as a fintech leader and enhancing its digital infrastructure. In May, ADQ successfully completed its third debt capital markets issuance, launching a US$2 billion dual-tranche bond to diversify its funding sources and enhance its financial resilience. The proceeds provide growth capital for projects aligned with ADQ's long-term strategy. The issuance accomplished broad institutional distribution from major investors across Asia, the US, the Middle East, UK and Europe and was oversubscribed by more than 3.5 times, reflecting strong investor confidence in ADQ's credit fundamentals and long-term value proposition. The board was also updated on the progress of ADQ's contribution to the UAE's National Strategy for Artificial Intelligence 2031 as well as Abu Dhabi's agenda in these areas. In addition to other relevant initiatives, ADQ has launched the Sprint AI programme which is aimed at driving innovation, digital transformation and AI adoption. The programme encompasses three key pillars: pillar 1 will support the development of advanced data infrastructure, governance, and analytics capabilities; pillar 2 will facilitate artificial intelligence research, adoption, and commercialisation across key sectors; pillar 3 will mobilise the development of innovative proof-of-concept solutions and pilot projects. By strategically deploying this funding, Sprint AI will enable ADQ's portfolio companies to bring groundbreaking technologies and practices to their operations, strengthening the future-readiness and resilience of ADQ's portfolio. First adopters include Silal, AD Ports Group and Agthia Group. The board was also updated on key achievements across ADQ's portfolio. In Energy and Utilities, TAQA and EWEC agreed to develop new energy infrastructure aligned with the UAE's National Strategy for AI 2031 and Net Zero 2050 goals. As part of this, TAQA signed a 24-year power purchase agreement with EWEC to develop the one-gigawatt Al Dhafra open-cycle gas turbine project. In Food and Agriculture, Silal signed a strategic partnership with Shouguang Vegetable Industry Group to build a 100,000 sqm agritech hub in Al Ain Region. The facility will leverage AI and robotics to boost efficiency and drive sustainable innovation in agriculture. In ADQ's Sustainable Manufacturing cluster, EMSTEEL, one of the largest steel manufacturers in the UAE, partnered with MediSun Energy, a brine management company, to launch a first-of-its-kind initiative in the UAE that will transform desalination brine into renewable blue energy and magnesium carbonate. The project aligns with the UAE's goals for innovation, decarbonisation, and resource efficiency. During the meeting, the board members leveraged the latest version of ADQ's AI Board advisor that integrates multiple AI tools to support decision-making. Built on ADQ's extensive knowledge base, the AI Board advisor provides expert insights and strategic recommendations to guide board discussions. Mohamed Hassan Alsuwaidi, Managing Director and Group Chief Executive Officer of ADQ, said, 'Under the visionary leadership of His Highness Sheikh Tahnoon bin Zayed Al Nahyan, ADQ continues to strengthen Abu Dhabi's economic resilience through targeted investments in high-impact infrastructure and strategic supply chains. The milestones achieved over the past quarter reflect our commitment to reinforcing the very foundations on which our emirate is built, while driving the continued growth of key economic sectors and creating commercial value for our shareholder.' The board reaffirmed its commitment to advancing ADQ's role as a strategic enabler of Abu Dhabi's economic diversification and global competitiveness. The meeting was attended by H.H. Sheikh Zayed bin Hamdan bin Zayed Al Nahyan, Jassem Mohamed Bu Ataba Alzaabi, Mohamed Hassan Alsuwaidi, Mohamed Mubarak Fadel Al Mazrouei, Dr Ahmed Mubarak Al Mazrouei, Sheikh Abdullah bin Mohamed Al Hamed and Kaj-Erik Relander. 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