CLASSIC CAR SPECIAL - Knight Frank
RESIDENTIAL RESEARCH
CLASSIC CAR SPECIAL
Luxury Investment Index Q1 2018
ART MOVES INTO POLE POSITION
FERRARI 250 GTO SETS NEW WORLD RECORD
LAND ROVER'S 70TH BIRTHDAY
WEALTH REPORT UPDATE
2
LUXURY INVESTMENT INDEX Q1 2018
Once again we have a new leader at the top of the Knight Frank Luxury Investment Index. Wine has been relegated to second place with art now some way in front. The performance of cars, meanwhile, has been relatively sluggish. That, however, hasn't dampened the appetite of genuine collectors for the most desirable vehicles.
Several marques and models are celebrating milestone birthdays this year. Porsche and Land Rover are both 70, while the iconic Ferrari 365 GTB/4 ? better known as the Daytona ? is 50. To help celebrate we've included the prices of some classic Porsche models on page 4, while I take a trip to the Jaguar Land Rover Classic Works on page 5.
I hope you enjoy reading this report as much as I enjoy writing it.
Please get in touch if you have any comments.
ANDREW SHIRLEY
The Wealth Report Editor
Art accelerates past wine to take the chequered investment flag
Classic cars have dropped down the grid in the Knight Frank Luxury Investment Index, but collectors are still spending big for the best machines
This time last year art was almost at the back of the Knight Frank Luxury Investment Index (KFLII), but 12 months later it has moved through the field to overtake wine and claim first place with growth of 21% to Q1 2018.
Salvator Mundi, a work by the Old Master Leonardo da Vinci, turbo charged the headlines when it was sold for a staggering $450m last year, but paintings by less well-known artists have also been notching up multi-million dollar results, says Sebastian Duthy, of Art Market Research.
"Prices for works by Impressionists and post-war artists have dominated auction sales for the past two decades. But this picture has been changing, with works by some contemporary artists appreciating rapidly in the last few years.
"In March, artist Mark Bradford hit the headlines when his painting `Helter Skelter I' was sold by ex-tennis star John McEnroe for a record $10.4m at Phillips in London. In May, rapper Sean Combs, aka P Diddy, paid $21.1m at Sotheby's for a painting by artist Kerry James Marshall. The figure represents an 800-fold increase on the $25,000 paid for the same work in 1997."
The Knight Frank Fine Wine Icons Index, compiled for us by Wine Owners, recorded overall growth of 9% over the same period, but the various sectors of the market are running at different speeds, says Nick Martin of Wine Owners. "The very top of the Burgundy market is on fire, with growth of between 20% and 70%, but Bordeaux is more of a mixed bag."
Classic cars, meanwhile, have shown negative growth over a 12-month period for the first time since the creation of KFLII. The value of the HAGI Top Index that we use to track the market slid by 1%. This sharp deceleration from the double-digit growth of recent years is largely because speculative investors have left the market, says HAGI's Dietrich Hatlapa.
"The most active buyers are the really knowledgeable collectors and enthusiasts
who know what they are doing and exactly what they want."
Such buyers won't pay over the odds for cars that don't have a great pedigree or aren't in the right condition, but they are still prepared to dig deep when they find a car they really want to buy.
Auctioneer Bonhams is hoping that will be the case when it puts an extremely rare lightweight 1961 Aston Martin DB4GT Zagato (see front cover) under the hammer at the Goodwood Festival of Speed in July. No guide price has been released for the car, which was raced by F1 legend Jim Clark, but Bonhams expects it to break the ?10m barrier, making it the most expensive car to be auctioned in the UK.
The Aston was famously involved in a crash with a Ferrari 250 GTO and 250 GT SWB at Le Mans in 1962. Only 39 250 GTOs were ever made and the US floor-mat magnate David MacNeil has just paid a reported $70m for a well-known 1963 model.
If accurate, it makes the Ferrari, known by its chassis number 4153 GT, in all probability the most expensive car to sell ever. Such is the car's pedigree ? as well as winning the Tour de France it finished overall fourth at Le Mans ? an entire book has been written about its history. Ownership also provides entry to exclusive events held solely for 250 GTO owners.
Access to such rarefied events is a big driver for specific segments of the market, points out Mr Hatlapa. "We've seen very strong prices paid for cars that are eligible for the legendary Monaco Historic Grand Prix, which is open only to cars that raced there in period," he explains.
A Mclaren-Cosworth car driven to victory at the 1993 Monaco Grand Prix by Ayrton Senna was the star of Bonhams' recent auction at Monaco where it was brought by former F1 supremo Bernie Ecclestone for 4.2m (about $5m).
WEALTH REPORT UPDATE
3
LUXURY INVESTMENT INDEX Q1 2018
Luxury investment performance versus other asset classes (to Q1 2018)
FTSE 100 500
PCL*
KFLII
CARS
GOLD
400
Index (Q1 2008=100)
300
200
100
0 08 09 10 11 12 13 14 15 16 17 18
*Knight Frank Prime Central London Residential Index Source: Knight Frank Research
% Volatility
10-year asset price volatility
25
?
20
Most volatile
15 ?
10
??
??
?
5
? ??
??
0
??
Least volatile
Gold FTSE 100
Cars Stamps
Art Coins Wine Coloured Diamonds
PCL KFLII Jewellery Chinese ceramics Watches Furniture
Based on annual price points Source: Knight Frank Research
KFLII performance by asset class (to Q1 2018*)
12 MONTHS
CHINESE CERAMICS
-2%
CARS -1%
ANTIQUE FURNITURE
-1%
COLOURED DIAMONDS
0%
STAMPS
1%
JEWELLERY
4%
COINS
4%
WATCHES
5%
KFLII 6%
WINE
9%
ART
21%
5 YEARS
COLOURED
CHINESE DIAMONDS
ANTIQUE CERAMICS
9%
FURNITURE -12%
-20%
STAMPS
11%
WATCHES
23%
ART
29%
KFLII JEWELLERY COINS
40%
41%
50%
WINE
58%
CARS 91%
10 YEARS
CHINESE
ART
WATCHES COLOURED STAMPS KFLII JEWELLERY WINE
ANTIQUE CERAMICS
FURNITURE
-32%
-4%
55%
69%
DIAMONDS
77%
103%
108%
138%
174%
*Chinese ceramics, coins, stamps, furniture, watches and jewellery to Q4 2017 Source: Knight Frank Research, Art Market Research, HAGI, Wine Owners, Fancy Color Research Foundation, Stanley Gibbons
COINS
182%
CARS 288%
4
WEALTH REPORT UPDATE
LUXURY INVESTMENT INDEX Q1 2018
Under the bonnet
With the help of HAGI we look at the nuts and bolts of the classic car market
Top marques
Number of cars sold at auction for over $5m*
Endurance race
Five-year price change by era*
1950/60s 225%
40%
OTHERS
60%
FERRARI
49 74
OTHERS
MERCEDES-BENZ BUGATTI PORSCHE ALFA ROMEO MCLAREN AC/SHELBY JAGUAR ASTON MARTIN FORD BENTLEY DUESENBERG ROLLS ROYCE TALBOT LAGO DELAHAYE HORCH
Source: HAGI *Prices converted to US$ at exchange rate prevailing at time of sale
44
7
3
3
7
3
2
2 11111
9
OTHERS
PodiumFEfRinRiAsRhI
PORSCHE
Annual price change by marque (12 months to April 2018)
MERCEDES-BENZ
+5.4% $40,0000
1958 356 A Speedster
$350,0000
1955 550 Spyder
-3.7%
$600,000
1973 Carrera 2.7 RS Touring
PORSCHE
Source: HAGI
$1,100,000
1989 tyFpEe 9R5R9 ARI
$250,000
1992 type 911/964 RS
MERCEDES-BENZ
Chequered flag
$800,000
2004 Carrera GT
+16% Top-priced model sold at auction from$11,05o0f0t,h0e0k0ey collectors' marques* 2013 type 918 Spyder +1.6% -0.1%
Pre-war 110%
1970s 200%
1980s 190%
1990s 210 %
Modern rare supercars 200%
* B ased on representative models with sub 1,000 production
Source: HAGI
Porsche at 70
Average price of iconic models*
$400,000
1958 356 A Speedster
$3,500,000
1955 550 Spyder
$600,000
1973 Carrera 2.7 RS Touring
$1,100,000
1989 type 959
$250,000
1992 type 911/964 RS
$800,000
2004 Carrera GT
$1,500,000
2013 type 918 Spyder
Source: HAGI
* prices can fluctuate significantly depending on condition, mileage, delivery specs, provenance & originality
FERRARI
B$u1ga0Ptt.Oi4RmSCHE
Type 55 Roadster (1931)
P$o1rs0ch.1e m
956 Le Mans winner (1982)
B$e7n.tl9eym
4.5 litre Blower Birkin (1929)
F$o1rd1.0m
GT 40 (1968)
M$c1La5rMe.n6EmRCEDES-BENZ
Aston Martin
$22.5m
DBR1 (1956)
F1 (1995)
A$C1/S3h.e8lbmy
Cobra 260 (1962)
Jaguar
$21.8m
D-Type (1955)
A$lf1a R9o.m8emo
8C 2900B Lungo Spider (1939)
Ferrari
$38.1m
250 GTO (1962)
M$e2rc9ed.5esm-Benz
WPri1x9(619G5ra3n) d
Source: HAGI *Prices converted to US dollars at exchange rate prevailing at time of sale
5
WEALTH REPORT UPDATE
LUXURY INVESTMENT INDEX Q1 2018
Something old, something new...
Andrew Shirley pays a visit to Jaguar Land Rover's Classic Works near Coventry to say happy 70th birthday to the world's most iconic off-roader and meet some other amazing classics
V8 is speed-limited to 106 miles an hour.
Just 150 were produced and even with a
?150,000 price tag the model sold out
within hours.
Although those looking for a good
example of a Series 1 can find one for
significantly less than ?75,000, the Reborn
programme has definitely added some
heat to the market, says Dietrich Hatlapa
of classic car analyst HAGI. "The cost of a
complete restoration can now be factored
into prices for perfect examples or highly
original cars."
Early 1970s two-door Range Rover
models and Series 1 E-types made between
1961 and 1968 have also received the
Reborn treatment, and again demand is
Then ? One of the original Land Rover Series 1 launch vehicles
exceeding supply despite these labours of love ? restorations involve as many as
When the Series 1 Land Rover was first unveiled at the Amsterdam Motor Show in 1948 it's unlikely anybody there would have believed that seven decades later the utilitarian mud-plugger would be a cult object of desire.
Not only are significant numbers of the earliest Land Rover still going strong around the world, but wealthy enthusiasts are paying huge sums of money to get their hands on a literally reborn automotive slice of history.
Since 2016, Jaguar Land Rover has
is strong, says Tim Hannig, Director of Jaguar Land Rover Classic. "The waiting list is up to two years long."
Historic
One historic Land Rover that would undoubtedly command a higher price, but is unlikely ever to be sold as it will form part of Jaguar Land Rover's extensive heritage collection, is currently being restored after being recently rediscovered languishing in somebody's garden. Looking in
1,600 man-hours ? costing ?140,000 and upwards of ?285,000, respectively.
The upwards climb in classic car values over the past 10 years (see page 3) has made the involvement of original manufactures in initiatives like the Reborn programme increasingly viable. As prices rise, other models like the XJS could be added to the line-up, says Jaguar Land Rover, although later cars can actually be
Continued overleaf...
been scouring the world for Series 1s in
need of some TLC, but otherwise in
restorable condition ? many surviving
remarkably good shape, the vehicle
models no longer have their original
(pictured) was one of the three
engines or have been extensively
exhibited in Amsterdam in 1948.
modified ? for its Reborn programme. As "This Land Rover is an irreplaceable
the name suggests, the donor vehicle is
piece of world automotive history,
taken apart completely and painstakingly and ensuring it is put back together
rebuilt to the original specification ? no
precisely as it's meant to be is a
mod cons are added ? as when it rolled of fitting way to help commemorate
the production line.
Land Rover's 70th anniversary year,"
It's not a new concept off course,
says Mr Hannig.
dedicated collectors and specialist
A souped-up version of the now
restorers have been doing something
discontinued Defender model ? the
similar for years, but the involvement
last direct descendant of the Series
of the original manufacturer has set a
1 ? was also created as part of the
new benchmark, not only in terms of
celebrations. Equipped with the
authenticity, but also price.
engine from the Range Rover Sport
A Reborn Series 1 will cost between
and with upgraded running gear
?75,000 and ?95,000, but the order book and rubber, the Defender Works
And now ? Special edition V8 Defender
Research Andrew Shirley The Wealth Report Editor +44 1234 720534 andrew.shirley@
Media & PR Celia McKelvey +44 20 7861 1033 celia.mckelvey@
INDEX SOURCES
Art
AMR
Chinese ceramics AMR
Antique furnitureAMR
JewelleryAMR
WatchesAMR
Wine
Wine Owners
Classic carsHistoric Automobile Group International (HAGI)
Stamps
Stanley Gibbons
Coins
Stanley Gibbons
Coloured diamonds Fancy Color Research
Foundation
Please contact andrew.shirley@ for more details of each index
New classic ? A continuation D-Type
more expensive to restore because of the way they are constructed.
Continuation
Jaguar Land Rover is one of several marques to take the idea of restoring its most famous models one step further by blurring the lines between new and old.
At first glance it's a stunning 1957 Jaguar XKSS, the road-going version of the racing D-type, that greets visitors to the reception area of Classic Works, but looks can be deceiving. The car was one of nine "continuation" models built in 2017 to replace cars that were destroyed during a fire at Jaguar's Browns Lane factory over 60 years ago.
Created using the original plans and techniques, the cars are definitely not replicas, insists Mr Hannig. "They are Jaguars with original chassis numbers built by Jaguar."
The "new-original" XKSS followed in the footsteps of a run of six lightweight E-types and it was announced earlier this year that the series is being extended to the D-type, which won the Le Mans 24 Hours race three times between 1955 and
1957. Twenty five of the racing cars will be built to complete the original planned run of 100.
Although the "continuation" cars are virtually identically to their in-period built siblings ? the build quality is probably higher ? and are even considered eligible for historic races, there is, however, one big difference ? price. While a "new" D-type certainly isn't cheap at over ?1.5m, a car raced in the 1950s could set you back as much as ?20m.
Pedigree
History is a vital component of the classic car market, says Mr Hatlapa. "Without that pedigree the price calculation becomes completely different." But Jaguar Land Rover says it hopes the establishment of a new racing series will enable its continuation models to develop their own sense of history.
As for the Land Rover, it seems likely that continued enthusiasm for the original Series vehicles and later special editions will ensure many more birthday parties and price growth over the coming decades.
Contacts and acknowledgements
HAGI ; Stanley Gibbons ; Wine Owners ; Fancy Color Research Foundation: ; AMR . AMR tracks the price movement of art, sculpture, prints and photographs, as well as well as antiques and collectibles such as silver, porcelain, carpets, clocks and more.
Front cover: Aston Martin DB4 GT Zagato. Image courtesy of Bonhams/Tom Shaxon
Knight Frank Research provides strategic advice, consultancy services and forecasting to a wide range of clients worldwide including developers, investors, funding organisations, corporate institutions and the public sector. All our clients recognise the need for expert independent advice customised to their specific needs.
? Knight Frank LLP 2018 This report is published for general information only and not to be relied upon in any way. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no responsibility or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage resultant from any use of, reliance on or reference to the contents of this document. As a general report, this material does not necessarily represent the view of Knight Frank LLP in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank LLP to the form and content within which it appears. Knight Frank LLP is a limited liability partnership registered in England with registered number OC305934. Our registered office is 55 Baker Street, London, W1U 8AN, where you may look at a list of members' names.
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