Quality Teak - Such an Attractive Investment

Quality Teak - Such an Attractive Investment

Across the world, one of the most highly regarded of all the tropical hardwoods is teak. Its prolific use within the furniture and construction industry is renowned. And it is the same attributes that create outstanding furniture and strong construction materials that make teak equally as attractive to the informed investor.

Predictable Growth

The investment itself is one that grows both visibly and financially. As a tree turns from a teak sapling into a fully grown specimen, the value of the investment also develops, showing that money really can grow on trees! Thanks to the reliability of the Teak species, it is possible to be confident in the return that such an investment will bring. The solid structure and natural resilience to pests, disease and adverse weather conditions creates a strong and solid material for production which cultivates a degree of certainty for investors that is not available in many other natural products.

High Demand

The hardwood taken from the Teak tree is highly grained and offers a beautiful colouring which makes the wood highly sought after in the furniture industry. As demand for such a raw material is on the rise, so the value of any investment in teak also increases. Used in a variety of ways, the versatility of the wood is such that even when market conditions impact on the overall timber asset class, teak prices remains buoyant.

Readily Available Markets

There are markets for selling both raw teak and the final products that are made from it. The products that are created are readily demanded and can frequently be founded in local marketplaces across the world, but especially in Asia where in many countries it is the wood of choice. In a similar way, the markets for teak investment are also readily accessible by large stockholders and individual investors alike. Any investment in Teak can be liquidated simply by felling the mature trees and selling them on to the local or global timber market, or by dealing in futures for immature trees via forward purchase contracts.

Limited Supply

Due to the long term growth required to produce high quality teak, the supply of the wood itself is relatively limited. Changes in volumes require patience and hard work and the current existing shortage is estimated to continue until at least 2030. This limited supply enables producers to claim a much higher price for Teak than other similar hardwoods and ensures that the value of the wood is consistently maintained. Such a resource limitation provides a much greater opportunity for the return on any investment made and more confidence in the ability of the initial capital to maintain its value against market fluctuations and rises in inflation.

Most major teak producing Countries have applied Laws to completely ban the logging of natural teak forests and to criminalize any groups involved in illegal logging. Supply and Demand economics should continue to maintain Teak as an expensive hardwood.

Over the past 30 years, teak has consistently outperformed stocks, bonds and a range of other commodities to provide an estimated 5%-15% annualized ROI to its investors creating a valuable and attractive asset for all those involved.

For further information please contact Silvinvest. The investments we have access to are in standing teak. This means that the trees you purchase are already semi-mature and this offer a certain amount of flexibility when considering an end date for your investment.You can book a telephone enquiry session or request a brochure using our appointment booking widget located top right.Cash Investments can be made directly or via a Self Invested Personal Pension (SIPP)if you are a UK citizen.