A high-profile Hong Kong real estate family is learning that the hot corner of finance (mainly loans) is its limitation.
according to Bloombergthe Parkview family in Hong Kong’s real estate empire (all the same in March, already suffering from a near-default tension), explored an art-backed loan with Sotheby’s earlier this year. Their quotes include over 200 works, including works by Andy Warhol, Pablo Picasso, Salvador Dalí, Yue Minjun, Qi Baishi and Zao Wou-ki.
However, the deal collapsed in concerns about logistics, especially the complexity of shipping and warehousing such a large collection in Sotheby’s facilities. according to Bloomberg, Parkview clarified that despite preliminary discussions, no agreement was reached and no loans were made. Sotheby’s did not immediately return a request for comment.
This episode highlights the charm and obstacles of art security financing: a way to allow collectors to take advantage of valuable liquidity without selling. Many of these works are displayed at Parkview’s Hong Kong Club and its Parkview Green Shopping Center in Beijing.
Faced with the continued bond pressure on Hong Kong’s property downturn and tightening the appetite of banks, Parkview pursues alternative capital. The company received a $38 million loan from the PAG and was engaged to a private credit source for at least HK$2.8 billion with the support of a residential tower. Additionally, it is revising with a $940 million loan related to its Beijing shopping mall after avoiding a technology default in March.
Meanwhile, Sotheby’s has been providing art loan services in Hong Kong since the second half of last year and has joined institutions such as HSBC and Citi to provide loans to alternative assets. Globally, by the end of 2023, its Financial Services Department has increased its loan portfolio to about $1.6 billion and launched a $700 million bond backed by art safety loans in 2024.
