Each quarter, property consultancy Knight Frank releases a report on their Luxury Investment Index, also known as the KFLII (Knight Frank Luxury Investment Index). Their index tracks the investment performance of ten following luxury asset classes: antique furniture, art, cars, Chinese ceramics, coins, colored diamonds, jewelry, stamps, watches and wine.
Over the past decade, cars, which are bundled into their own index known as the HAGI, have reigned supreme as the KFLII’s top performing luxury asset class, with a total growth rate of 289%. However, over the past 12 months they have been superseded by art and wine, posting price growths of 25% and 7% respectively. In this time cars saw a price growth of 6% which is certainly a reputable result, and is good enough for 3rd place. You can see the full results in the infographic below which breaks down the performance of all ten asset classes over the past twelve months (up to the release of the report), five years, and decade.
As you can see from the infographic to the left, art has taken a commanding lead over the past 12 months with its 25% price growth. Key record setting auctions can be attributed to such performance, such as the sale of the Salvator Mundi. This piece, which was known as the last work by Leonardo da Vinci remaining in private hands, sold at Christie’s New York last year for $450.3m. Purchased by the Louvre, this piece holds the title of the most expensive piece of art ever sold – and does so by a wide margin. Another sale that can be attributed to such growth is of Untitled by Basquiat, which sold for over $110m and holds the record for most expensive work ever sold by an American artist.
While cars did fall out of the top spot, their growth of 6% is still quite worthy of discussion. Key drivers include milestones like the 50th anniversary of the Ferrari Daytona and Aston Martin DB1, and the 70th birthdays of iconic brands Land Rover and Porsche. While 6% is certainly a positive, another important detail to note is that this report was published prior to Monterey Car Week 2018, whose auctions realized of over $371m (the third highest ever) and included multiple record breaking sales. It saw a 1962 Ferrari GTO sold by RM Sotheby’s fetch over $48m, setting the record for most expensive car ever sold at auction. A 1935 Duesenberg SSJ Roadster sold by Gooding & Co. amassed $22m, setting the record for the most expensive American Car ever sold at auction. You can learn more about other notable sales and the full auction results of this year’s Monterey Car Week by reading our recap here. As more records continue to be set, the HAGI very well may see itself ascend the report’s rankings.
Wine, which took second place in in the KFLII with a 12-month growth percentage of 7%, can attribute its success to the ever rising, never satiated global demand for top wines – with the Far East being a main catalyst. Some communes saw their volume decrease as much as 70% due to frost damage, leading to a perfect storm of low supply and high demand.
Jewelry and watches reported growth of 0% and 5% respectively. With the record breaking sales of the ‘Pink Star,’ a 59.6-carat vivid pink diamond, which was purchased by the Hong Kong jeweler Chow Tai Fook for $71m. A Paul Newman Rolex Daytona also set records after being sold for $17.8m by Phillips.
The Knight Frank Luxury Investment Index is a great tool to measure the luxury investment markets. If you are looking to add to your luxury asset portfolio, Borro Private Finance can help you raise liquidity efficiently and discretely. Contact us at 1-888-778-0156 or email us at email@example.com