Asian Plantations highlighted the difficulty in obtaining fresh land in Malaysia for oil palm plantations even as it secured the purchase of its fifth estate, for what it termed an "attractive valuation".

The plantation developer paid 45m remninbi ($14.7m) to acquire 7,000 hectares of land in Sarawak zoned for oil palm plantation, but yet to be planted.

The deal, which is subject to bank financing, worked out at an average of $2,100 per hectare, which it termed an "attractive valuation", especially given the high proportion of the site that can be used for plantings.

Fully developed plantation land typically sells for some $30,000 per hectare, according to City estimates.

'Increasingly scarce'

However, Asian Plantations, a key part of whose business plans rests on sourcing and developing palm plantation land, signalled that this could be the last acquisition for now.

"It has become more apparent during the course of 2011 and 2012 that the availability of appropriately-titled land suitable for the development of palm oil plantations in Sarawak is becoming increasingly scarce," Dennis Melka, group joint chief executive, said.

Indeed, the quest for new plantation land is driving many groups to investigate West Africa, a region which many investors have previously steered clear of for fears over political instability.

While the group was to continue its quest for fresh sites "our main focus will now be on fully planting our existing plantations and opening our milling facility".

The deal leaves Asian Plantations with more than 8,000 hectares to plant in a campaign set to give the group 22,000 developed hectares by the end of 2014.

The group's total landbank after today's purchase, which is dependent on bank financing, will reach 27,770 hectares.

Market reaction

The acquisition, from a Malaysian family, was viewed by Panmure Gordon analyst Graham Jones as being struck at a "very attractive" price.

The broker, which earlier this summer had a "buy" rating on Asian Plantations shares, said it was keeping its rating under review, and questioned whether this would be the group's "last deal".

Asian Plantations shares stood 0.2% higher at 230p in afternoon deals in London.