Wine overtakes classic cars on Luxury Investment Index

Online since 5.09.2017 • Filed under Property & Real Estate • From Issue 6 - September 2017 - February 2018 page(s) 74
Wine overtakes classic cars on Luxury Investment Index

Wine has topped the Knight Frank Luxury Investment Index (KFLII), knocking classic cars off pole position into second spot. This follows strong annual growth in key regions around the world that form the backbone of most investment cellars.

Data from the latest edition of The Wealth Report has revealed the value of The Knight Frank Fine Wine Icons Index, rose 24% in 2016, dwarfing its more modest 5% growth the previous year. Classic cars increased in value by 9%, falling from 17% growth the previous year.

Andrew Shirley, editor of The Wealth Report, comments: ‘Last year’s stellar wine performance sets it apart from the other investments in our index. Several other asset classes also produced some record-breakers, even though their overall performance was relatively muted. The sparkiest was the sale of the Oppenheimer Blue, a vivid blue 14.62-carat diamond sold by Christie’s Geneva for the equivalent of almost US$51m, making it the most expensive jewel to ever sell at auction.’

Nick Martin, founder and executive director at Wine Owners – which compiles the Knight Frank Fine Wine Icons Index – explains why investment-grade wine performed so strongly last year: ‘In 2015 we saw growth of around 8% for the whole of the Bordeaux region off the back of steep declines between 2012 and 14 following the burst of the Chinese-induced Bordeaux bubble in late 2011. However, in 2016 the top Bordeaux blue chips drove the entire market, growing 9% to the end of June.

Brexit turbo-charged the market with the devaluation of sterling, feeding more positive sentiment into a market had already been gathering significant momentum. The first growth rose a further 18% between June and November 2016, resulting in an annualised performance of over 30%.’ The strong performance of wine could not prevent the KFLII, which tracks the performance of 10 luxury investment sectors, from posting annual growth of just 2% – its weakest performance since experiencing a 2% drop in 2009.

Some examples, in addition to the Oppenheimer Blue, of record-breaking sales in 2016 include:

• A Ferrari 1957 335 Sport became the most expensive car to go under the hammer ever, in Euro terms at least, when it was sold by Artcurial in Paris for 32m.

• A rare stainless steel 1941 Patek Philippe ref 1518 perpetual calendar chronograph with moon phases broke the record for the most expensive wristwatch sold at auction when it went under the hammer with Phillips Geneva for US$11m.

• Bonhams London sold a 14.13-carat ring for £1.4m in December against a high estimate of £800,000.

• A 1962 Ferrari 250 GTO sold privately is thought to have exceeded the highest sum ever paid at auction last year (US$38m for another 250 GTO sold by Bonhams) for a classic car and was possibly the biggest deal ever struck.

Issue 6 - September 2017 - February 2018

Issue 6 - September 2017 - February 2018

This article was featured on page 74 of SABI Magazine Issue 6 - September 2017 - February 2018 .

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