ANALISIS DE DESEMPEÑO

Introduction

The Polish art market has been strongly affected by historical events in Poland. The decades of communism that followed World War II put its development on hold, stopped the tradition of art collecting and delayed the natural process of society becoming more affluent. The Polish art market as it exists today only began to emerge after 1989 when the communist era ended and Poland became a free market economy. Before then, there was a monopoly in the art market, with state-owned enterprise DESA being the only entity that could legally deal in art. In 1989 the free art market in Poland started to build and the situation changed. The first auction houses were established in 1990, galleries have flourished and today, over twenty years later, the Polish art market is worth Polish Zloty (PLN) 300-350 million (1 PLN = €0.24, 0.32 US$), which, although it is mere 0.2% of the global trade value, is great news. It is believed that the Polish market, while relatively small in size and underdeveloped, is largely undervalued and its potential is estimated at as much as seven times the above amount.69

Market value

The current standing of the Polish auction art market looks highly positive. In 2011, sales increased by 16.6%, which marked the beginning of rapid growth. In the first half of 2012, auction sales totalled PLN 30.1 million, representing growth of over 90% in 12 months, a record level since 1989. Although the increase slowed down in the second half of the year, with full-year sales coming in at PLN 60, 804,307 (a 25.7% increase compared with 2011), it is still believed to be one of the best years in the country’s history.

2011 H1 2012 H1 Change Sales (PLN million) 15.8 30.1 (+) 90.5% Number of transactions 2024 2480 (+) 22.5 % of lots sold 30,3% 38,8% (+) 8.5% Number of auctions 56 54 2011 2012 Change Sales (PLN) 48,386,398 60,804,307 (+) 25.7% Number of transactions 5,384 6,630 (+) 23.1% % of lots sold 36.4% 42.3% (+) 5.9 p.p. Number of auctions 125 123 (-) 1.6%

Table 5: Performance of the Polish auction market (H1 2012)

Table 6: Performance of the Polish auction market (FY 2012)

Source: Art & Business Annual Volumes, websites of auction houses

Market players

According to the Central Statistical Office of Poland (GUS), there are 777 museums and 352 galleries in Poland.70 _{It can be assumed, however, that there are}

hundreds more small antique shops and private dealers and collectors. There are several auction houses, based mainly in Warsaw but operating throughout the country. Recently, a new auction house—Abbey House—has opened in Poland, which seeks to exclusively promote and sell the work of selected young artists. Abbey House also set up the first art fund in Poland. Established in 2011, the Abbey Art Fund invests in special purpose vehicles (SPV) that later transfer funds to both public and private firms in the art market, global art funds, collections and particular works of art. The fund always leaves 20% of its assets in cash. Since its inauguration in autumn 2011, the Abbey Art Fund has delivered a gain of 16.6% for its investors. With the expansion of the art market, and the growing interest in art as an asset class, it is believed that Poland will continue to see a steady rise in the number of funds coming to market—according to the initial data from the survey that Deloitte Poland conducted among art market experts, 40% answered that there will be an increase in the number of art funds in Poland.71

Market structure

The dominant category in the Polish art market is paintings, which generate the most transactions (73%) and the highest value (92%). Graphics and crafts come second and third, with 25% and 7% respectively. The advantage of painting over other mediums results mostly from the above-mentioned development over the last five years of young artists, who mainly produce paintings. The market pricing structure has undergone significant change during this period.

• The lowest price segment increased its share of the total number of transactions; works by the youngest artists are sold for the average price of PLN 1,500

• The average price has decreased: five years ago, only one in ten paintings could be purchased for less than PLN 2,000, whereas in mid-2012, 49.5% of all transactions involving painting and works on paper did not exceed PLN 2,000

On the Polish market, art created after 1945 accounts for 75% of all artworks offered at auctions.

The primary market is considered as the most active art distribution sector in Poland due to its promotion of Polish artists nationally and internationally and access to foreign sources of funding through sales and exhibitions— according to the report by Wealth Solutions, between September 2011 and September 2012 galleries in Warsaw organised almost 190 projects and observed a 25% increase in sales in comparison with the previous season.

Figure 27. Breakdown of transactions by category (H1 2012)

32%

25%

43%

Art segment in the number of transactions (1st _{half 2012)}

Young art Contemporary art

Source: Polish auction market. Report on the first half of 2012. Abbey House Auction House

70 Główny Urząd Statystyczny Działalność instytucji kultury w Polsce w 2011 r

Art & Finance Report 2013 77

Source: Polish auction market. Report on the first half of 2012. Abbey House Auction House

Biggest transactions

The first place in the ranking is held by a painting entitled ‘Rozbitek’ (Wrecked) by Henryk Siemiradzki, sold in 2000 for PLN 2.13 million. A set of three pastel portraits of the Sternbach family by Stanisław Wyspiański, sold in March 2012 for PLN 1.85 million, ranks second. Prices in excess of PLN 1 million are still rare in Poland.

Figure 28. Price structure of different art categories offered in auctions (H1 2012) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Young art Contemporary

art Art before 1945

100,000 PLN and more 50,000 - 100,000 PLN 10,000 - 50,000 PLN

2,000 - 10,000 PLN 0 - 2,000 PLN

Source: Polish auction market. Report on the first half of 2012. Abbey House Auction House

2% 18% 80% 18% 4% 1% 40% 36% 16% 38% 33% 7% 4%

Art as an asset class

Until recently, alternative investments in Poland were not very popular, and knowledge and education in this area was scarce. However, with the volatility of the global financial markets and the fact that both property and shares have disappointed repeatedly in Poland over the past few years, the idea that you can combine good profits with pleasure has started to attract Polish investors, who now add more alternative assets, including art, to their investment portfolios.

The belief that only the richest can afford to buy art is still prevalent in Poland, but art purchases by middle-class buyers have been increasing. This has mainly been possible because of the rapid development of ‘young art’, which has significantly altered the pricing structure of the entire art market.

Why this popularity? There is an increase in overall prosperity: the number of Poles earning over PLN 7,100 gross a month has nearly doubled in the last ten years, with average income growing by nearly a third72_{. And}

although there are just over 28,400 HNWIs in Poland in 2012, Wealthinsight predicts the total number of Polish HNWIs will increase by 40%, to reach 39,687 in 2017.73

Moreover, the art market in Poland is becoming more transparent and more is known of its complexities, thanks to an increasing number of articles and reports in the Polish media, more magazines and art portals dedicated to art topics, such as Art & Business, Rynek i Sztuka, Artysta i sztuka and Art Bazaar—all of these build communities that share knowledge on art and promote the idea of art investing. Poles have started to treat art not only as an important element of a particular lifestyle, but also as an element of their environment.

With the growing interest