Investing in Teak– Elite Teak Trees – UK Trust Company Protection
If you are looking for a sustainable investment but don’t want to compromise on the level of return,
investing in teak trees may be the ideal solution. With a track record of the teak wholesale price increasing consistently at levels above inflation, a teak plantation investment enables investors to generate healthy returns while maintaining an environmentally-friendly portfolio.
The Teak Tree produces a durable hardwood, much sought after for outdoor and marine use due to its level of natural oil. Teak endures the elements without shrinking, swelling, cracking, warping or rotting. Superior garden furniture is often made of teak due to its attractive golden-brown finish and natural weather-proofing qualities.
Increasing global demand for teak outstrips supply by quite some margin. Teak supplies have become particularly scarce because countries have improved the enforcement of bans on felling naturally-grown teak trees, particularly in Asia. Such embargoes, coupled with growing Asian economies, create an imbalance between supply and demand which impacts the price of teak on the international market.
Over the past few decades, teak prices have risen steadily at a rate above inflation. The last 50 years have seen teak prices rise by 6 percent per year, on average. Price growth is predicted to remain steady above inflation.
Teak Plantation Investment:
Investors considering an investment in forestry are of course advised to carry out due diligence and ensure that the teak plantation in which they intend to invest is well managed.
We would advise investors to only buy into a plantation which uses the most advanced growing techniques and which has a proven track record of sustainable management. Investors can further minimize their risk by investing in a teak plantation at a point in time when the trees are established, after 5 to 7 years of growth.
From years 7-10, a well-run plantation will thin the trees, clearing the canopy and ground to allow for optimal room for growth for the remaining trees. Teak trees are often harvested after 16 years, but many investors prefer to leave them to continue to grow until 25 years, when they would have doubled in size and value.
There are many other factors that contribute to a well managed teak plantation and we provide an investor report which runs through these in more detail.
Legal Protection:
As teak is a medium to long-term investment, it is essential that investors’ interests are protected properly over this entire time period and for every eventuality. The best way we have developed is to have the purchase order protected by a UK Trust company. Crucially this UK Trust company has first charge over the assets, land and trees which provides a genuinely accessible route of continuing the investment even if the plantation company were to go out of business.
Additionally, the UK Trust company has independent trustees (UK Lawyers) who are legally bound to act in the best interests of the beneficiaries (investors). They actively manage the financial and operational workings of the plantation company for you.
Timber is the world’s third largest commodity and is increasingly recognised as a solid investment opportunity. You can create a positive carbon footprint while reaping a healthy return on your capital through just such a
sustainable investment.
sustainable investment
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