Published

19.9.23

The Value of Art in Real Estate

 

What role does art play in space-making, destination creation, and city building? And what role can the private sector and real estate industry play in integrating art? These were the key questions Alserkal Advisory posed during our participation in the property development conference, Cityscape Global in Riyadh. 

 

Alserkal Advisory is an arts and culture consultancy composed of alternative thinkers committed to fostering lasting impact on society and the environment via the creative economy. Born from Alserkal Avenue, a real estate development-run cultural district, we are uniquely qualified to respond to this question. Home to the Gulf’s first art house cinema, art foundations, artist studios, and an array of homegrown and regional galleries, Alserkal has played a key role in shaping the local arts scene with a ripple effect across the region. 

 

We know first-hand the impact of art on the success of businesses and neighborhoods. While the Avenue’s offering has grown from art galleries, art remains our biggest brand association with approximately 40% of visitors coming specifically to experience art. Furthermore, our surrounding industrial area has been designated into a creative zone with revamped warehouse clusters embracing creative industries. 

 

"The mere presence of art possesses the potential to elevate residential property values by as much as 20%."

While the correlation between art and socio-economic impact is understudied globally, recent studies in the United States have cited that residents in an arts-rich neighborhood are 1.6 times more socially connected and that cultural tourists tend to spend nearly twice as much while traveling as other tourists do. These statistics are further illustrated by case studies. Consider for instance Anish Kapoor’s Cloud Gate Public Sculpture in Millenium Park, Chicago affectionately known as ‘The Bean’. It became an iconic selfie-magnet synonymous with the Chicago experience attracting 5 million visitors a year. The High Line, a once abandoned elevated train track repurposed with art commissions and programming as its main attraction, grew its footfall from 1.3 million to 7.6 million and raised property prices 10% faster from areas only a few blocks away.

 

In the Gulf, investment in arts and culture continues to be a catalyst for social engagement. This year alone, the second edition of the Islamic Arts Biennale in Jeddah drew 600,000 visitors— just shy of the 800,000 visitors that the Venice Biennale receives. Meanwhile, the relatively young Louvre Abu Dhabi has become the most visited museum in the Arab world. The full extent of art’s economic impact may initially appear immeasurable, but as we begin to quantify it, we will realize the sheer scale of its impact. Dubai Culture and Arts Authority recently reported that the 16th edition of Art Dubai was linked to 23,500 hotel room bookings, generating AED 143 million

 

So, what does this mean for real estate? The significance of art is undeniable and, more significantly, integral for the socio-economic transformation of urban areas. The mere presence of art possesses the potential to elevate residential property values by as much as 20%

 

Our aspiration is for art to be strategically integrated into the fabric of private or public spaces, not as decor, but as culturally resonant, statement-making work. Art will enhance your visitor experience, increase dwell time in your spaces, and translate into positive brand associations and increased ROI. 

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