Sotheby's sets Egon Schiele record of $40 million

LONDON (Reuters) - Sotheby’s auctioneer sold a rare cityscape by Austrian artist Egon Schiele for a record 24.7 million pounds ($40.1 million) at a London auction on Wednesday.

A Sotheby's employee poses with artist Egon Schiele artwork "Hauser mit bunter wasche (vorstadt II) / Houses with laundry (suburb II)" at Sotheby's Auction House in London June 17, 2011. REUTERS/Luke MacGregor

The auction house had expected to fetch between 22 and 30 million pounds for the work, called “Hauser mit bunter Wasche ‘Vorstadt’ II” (“Houses with colorful Laundry, ‘Suburb’ II”).

The sale price included a buyer’s premium, meaning that despite comfortably setting a new auction benchmark for the artist, the work sold at the lower end of the expected price range.

The work was painted in 1914 at the height of Schiele’s short career, four years before his death in the Spanish influenza epidemic at the age of 28.

Proceeds from the sale are expected to be used to help pay for the settlement of a long-running restitution dispute over a 1912 portrait of the artist’s lover Walburga Neuzil (Wally).

A Manhattan court upheld claims the work had been seized by the Nazis, prompting the Leopold Museum to pay $19 million in 2010 in an out-of-court settlement to keep the painting.

Only three notable Schiele cityscapes have been offered for auction in the last decade, including one sold in 2006 for $22.4 million -- the previous world auction record for the artist.

Overall, Sotheby’s raised 97.0 million pounds at its impressionist and modern art sale, within pre-sale estimates.

The solid total follows Christie’s equivalent sale on Tuesday which raised 140 million pounds, also comfortably within expectations.

The auctions kick off a busy few weeks of sales in London, where wealthy collectors’ and investors’ appetite for fine art are being put to the test.

The market rebounded strongly in 2010 after a sharp contraction in 2009 caused by the global financial crisis.

Reporting by Mike Collett-White; editing by Patricia Reaney