Dubai Diamonds (page 1 of 2)

By Susan Adams, Forbes

Up next? On 31 January 2008, Christie's, the market leader in jewelry for more than a decade, will hold its first-ever sale of jewels and watches in Dubai, followed the next day by an art auction with pictures by top artists from the Arab world and India. The sales will take place at the Jumeirah Emirates Towers Hotel.

Dubai is "an area of the world that is booming right now, that is catering to the super-rich," observes François Curiel, chairman of Christie's Europe and international director of the jewelry department. "Over the past four years, I have noticed an increasing number of buyers from Dubai coming to our auctions in New York, Geneva and Hong Kong."

In Pictures: Dubai Rocks
In Pictures: Middle Eastern Superstructures
In Pictures: World's Billionaires 2007
In Pictures:100 Most Powerful Women
In Pictures: World's Richest Royals

Booming Marketplace

Because this tiny Persian Gulf citystate has less oil than its neighboring Emirates, its billionaire Sheikh ruler, Mohammed bin Rashid Al Maktoum, is investing heavily in building a trade, financial and tourist mecca like no other.

In less than a generation, this formerly desert way station has transformed into a glittering, free-spending juggernaut, home to ever-more-gigantic shopping malls (the soon-to-open five million square foot Dubai Mall is billed as the largest on the planet), and host to increasing numbers of well-heeled tourists. In 2006, visitors to Dubai totaled seven million, while the resident population is just 1.2 million.

What luxury purveyor wouldn't want to take advantage of the increasing numbers of international open wallets, especially when there's no sales tax? Dozens have already flocked here, including high-end jewelry brands Cartier, Van Cleef & Arpels, Tiffany, DeBeers and Bulgari. For jewelry in particular, Dubai boasts a tradition as a Middle East trading center in diamonds and gold.

So it's no surprise that top auction houses Christie's and Sotheby's are taking steps to stake out art market outposts here. Christie's was first out of the gate, with a sale of modern and contemporary art in May 2006 that emphasized work from the Arab world, Iran, India and Pakistan. That auction fetched $8.5m. Sotheby's is planning to open an office in Dubai, though no date has yet been set.

Important marketplace

While the auction market surged across most categories last year - Christie's just announced a year-end revenue total of $4.67bn, up 36 per cent from 2005 - the house's jewelry sales grew a hearty 27 per cent in 2006, to $354m.

Fifteen years ago, notes Ralph Esmerian, a prominent New York jewelry dealer and collector, collectors from the Arab world, primarily from Kuwait and Saudi Arabia, were big players in international jewelry auctions.