A furniture set, which was used by German nobility in the 1860s, is priced at 3.6 million yuan. [Photo Provided to China Daily]

Old European furniture settling into new homes of China's affluent

Buying expensive property has often been perceived as a lucrative investment in China. But furnishing them with antique European furniture seems to be a surer way to unlock value, considering that antique furniture prices are skyrocketing because of limited supplies and increasing demand, dealers say.

Though European antique furniture has a relatively short history in China of just 10 years, it has long been the prized possessions of the rich and famous in nations such as the United States, Japan, Thailand, India and Russia as well as in the Middle East, says Wang Chongwei, general manager of Sydelia Antique Furniture in Beijing's 798 Art District.

Wang, who has been in the antique furniture business for more than seven years, says the store is a unit of Austria's Antik-Mobel Hesz, one of the top three antique furniture dealers in Europe that has more than 40 stores covering between 5,000 and 6,000 square meters worldwide.

The Beijing store sells a wide range of products that are worth more than 80 million yuan ($12.7 million, 9.6 million euros). A wardrobe made in the 16th century is priced at 600,000 yuan, while a furniture set from Vienna's Schonbrunn Palace that was once used by Elizabeth of Austria (also known as Empress of Austria or Queen of Hungary) in the 1850s is priced at 3 million yuan.

European antique furniture prices have been growing steadily every year, and Wang's store is no exception. Price tags of antique furniture are revised upward at the end of each year at our store, he says.

"Within three years, our prices have almost doubled as the value (of European antique furniture) is growing worldwide," Wang says.

"Anything you buy today will seem very cheap in the years to come. There are more and more people buying and less and less genuine antiques. That alone can push up prices and make a clever buy a good investment," says Christopher Pyne, an antique furniture expert from Europe who also worked for global auction house Sotheby's until 1994.

Because of the increasing number of people interested in European antique furniture, dealers have been looking for the services of European experts like Pyne.

Having 25 years of experience in appraising antique furniture, Pyne is a council member of the Furniture History Society. A group of scholars in Britain and elsewhere are members of the organization.

"Chinese people absolutely love Western furniture, especially French furniture, and they value our pieces highly. However, our cultures are so different that there is a lot to learn," he says.

An antique chair that was made in the Victorian period is priced at 180,000 yuan at Sydelia Antique Furniture store. [Photo Provided to China Daily]

Pyne came to China to teach people, lecture, explain and demonstrate the similarities and differences in furniture.

A report last month by the Daily Mail said that a carved English bookcase, which fetched 980 pounds ($1,546, 1,169 euros) at a London auction, was sold later for 10,000 pounds in Beijing. An oak sideboard that picked up for 340 pounds in Britain was sold for 3,800 pounds in the Chinese capital, the report said. Auctioneer Tom Keane was quoted as saying that he was astounded by the prices the Chinese middle class is willing to pay to own antique furniture.

Wang says there are mainly three kinds of buyers. "Some people want to use something unique, some really love it, while others collect the furniture as a kind of investment."

Compared with other markets, the European antique furniture market in China is still small, says Wang, who worked in Europe for Antik-Mobel Hesz for six years. There are only 20 dealers in China, he says. Though the market is small, the growth has been significant, indicating a budding market.

Zhang Hongbin, general manager of Qingdao Shengxinyu Art Co Ltd, based in east China's Shandong province, says sales have been growing at an annual rate of 30 percent since his company entered the business three years ago. Most of the buyers are rich people who may have been to Europe or know about the history, culture and art of the continent, Zhang says.

Antique furniture sales in China are mostly limited to middle- and low-end products as high-end products are too expensive for common dealers, he says.

European antique furniture is a new market in China and the profit margins for dealers can be very different depending on the quality and uniqueness of the products. Zhang says for some products the margin can be as high as 300 percent or even higher. The transportation costs and purchasing channels also affect margins, he says.

But for Sydelia Antique Furniture, the profit margin is not that high.

Wang says his company usually sells products with a 50-percent markup, but 35 percent of the gain is used to pay for transportation, operating costs and others expenses.

Though the profit margin is varied, the growing demand still offers promising prospects for European antique furniture dealers.

Wang says sales figures at Sydelia Antique Furniture have been growing by between 50 and 100 percent annually over the past seven years. Sales numbers last year rose by 50 percent to 90 million yuan from the previous year, while figures in 2009 doubled the 2008 numbers.

Lily's Antique, a Beijing furniture store at Gaobeidian, or Classical Furniture Street, started to sell European antique furniture in 2010. Han Ning, sales manager of the store, says sales of European antique furniture grew by 40 percent last year from 2010. Prices at Lily's Antique often range from several hundred to tens of thousands of yuan.

In Europe and the US, valuable and unique antique furniture is often in the spotlight at major auctions, like the ones organized by Sotheby's. However, auctions are not a popular platform for selling antique furniture in China because the market is still not well developed.

"European antique furniture auctions are a very small business for our company. The furniture is mainly auctioned as consumer products instead of for investment or collections," says Deng Jing, a spokeswoman at China Guardian Auctions Co Ltd, a leading auction house in China.

Such furniture in China is instead marketed and promoted through other channels, such as exhibitions.

Shanghai Real Exhibition Service Co Ltd has held exhibitions for European antique furniture dealers for five years. The dealers include companies from both home and abroad.

"Many European antique furniture dealers think that the Chinese market is promising as the rich in China are not satisfied with furniture manufactured in modern production lines any more. Buyers also want something with historic and cultural value that is worth collecting," says Huang Guangnian, general manager of Shanghai Real Exhibition Service Co Ltd.

"Five years ago, there were only two European dealers who came to our exhibitions, but now there are more than 20," he says.