“There is a certain type of energy that is created at an auction.” says Jonathan Crockett, Asia chairman of the auction house Phillips, which has relocated its regional headquarters to the cultural district. “One can never predict how far someone is going to bid.”

The purpose-built 52,000 sq ft premises, which are intended to complement its sales offices in New York, Geneva and London, are spread across six floors and include permanent galleries, a saleroom and an office.

The space was designed by Herzog & de Meuron – the Swiss architectural practice that designed the much-acclaimed, T-shaped M+ nearby – and Hong Kong’s LAAB Architects.

The main areas opened in March with an exhibition of 20th-century and contemporary art, design, timepieces and jewellery, carefully timed to coincide with the always popular Hong Kong Art Week.

“We have developed a reputation for being the [auction] house that introduces new names to the Asian market.” Crockett says. “This is the first time any auction house in Hong Kong has ever had a permanent exhibition space and an auction room.”

These advantages will help Phillips to take its own business to the next level and also add significant impetus to the broader drive to promote the cultural and creative industries – an economic initiative which has really taken off in the past few years.

Official figures compiled for 2021 show the total value of Hong Kong’s trade in artworks, collectors’ items and antiques reached HK$66.6 billion (US$8 billion). This was about four times higher than the equivalent figure for 2017.

As the art auction market has continued to grow, the city has come to be seen as a genuine rival for long-established centres such as London and New York.

“Unlike many of its international counterparts, Hong Kong serves not just the local art community, but also acts as the main pan-Asian hub for the trade in art,” Crockett says.

“The city is on the doorstep of mainland China, the world’s second-largest economy. The legal system here is robust; there are world-class logistics companies; and the infrastructure is in place to serve an auction market.”

Originally founded in London in 1796, where one of its early deals involved selling Marie Antoinette’s paintings, Phillips has moved fast since first setting up its local operation eight years ago.

Phillips’ initial six-strong team expanded rapidly, and in 2021 made a significant contribution to the company’s total reported sales of HK$2.1 billion, which was close to double the previous year’s total.

The Covid-19 pandemic presented obvious challenges, but Hong Kong remained resilient and suffered only a mild setback of a 2 per cent drop in 2020 – substantially less than the double-digit declines in New York and London. This enabled Hong Kong to overtake the UK capital as the world’s second-largest art auction market for the first time, and it maintained the lead in 2021.

For Phillips, it also brought opportunities to develop online auctions and establish a wider network within the vibrant and growing community of art enthusiasts in China’s Guangdong-Hong Kong-Macau Greater Bay Area development zone, which includes the cities of Hong Kong, Macau, Guangzhou and Shenzhen.

As a result, the company is now viewed as a leading platform for buying and selling 20th- and 21st-century collectibles, while also consulting for museums and advising private estates and companies on offers, appraisals and valuations.

However, Phillips is also looking to capitalise on new synergies within the cultural district. One recent example was the successful March 30 sale of Yayoi Kusama’s acrylic painting, Pumpkin, which went for HK$56 million – one of the highest-ever values achieved for one of her works at auction. The sale coincided with a large-scale exhibition of the Japanese contemporary artist’s work at M+.

“The city is home to international galleries, auction houses and art fairs,” Crockett says. “With the opening of world-class venues, such as M+ and the Hong Kong Palace Museum [in West Kowloon Cultural District], we can attract art lovers from around the globe. In particular, the advent of mainland Chinese buyers is drawing people to the city’s art trading events, so we are positive about achieving remarkable growth in Asia.”

InvestHK – the government agency responsible for supporting mainland Chinese and overseas businesses that wish to set up, or expand their presence, in the city – works by helping to boost foreign direct investment, which is crucial in supporting new industries and spurring economic expansion.

It works with companies ranging from start-ups and small and medium-sized enterprises (SMEs) to leading multinationals, promoting Hong Kong’s numerous advantages as a top location for building a business in Asia.

In the case of Phillips, that would have meant highlighting the city’s straightforward and competitive tax system, its zero tariff on art trading, the abolition of estate duty in 2006, and the almost unlimited potential for further development as one of the world’s major auction centres.

“We are constantly looking at ways to advance and grow our business across the region,” Crockett says. “I would like us to be market leaders in all the categories we operate in at some point in the near future.”