The consortium, comprising Morgan Stanley, Gateway Capital and Pamfleet, bought the building in Hong Kong's main business district from Hang Seng Bank. Hang Seng, which uses the office block built in 1962 as its headquarters office, says in a statement it would lease the 260,000-sf asset from the new owners for up to 18 months before moving to new premises.

Hong Kong rents are soaring as three-year leases catch up with a 70% rise in property values since 2003--when the economy was in the midst of SARS-related doldrums. Top-grade office rents rose 6.4% in the first three months of the year and are expected to climb 20 to 25% for the whole of 2006, according to research by Jones Lang LaSalle.

So far this year, Morgan Stanley Real Estate has also spent HK$960 million ($124 million) on a majority stake in Hong Kong apartment firm Shama and HK$655 million ($84 million) for another office building in the Central district. Hang Seng vice chairman Raymond Or says the asset disposal will maximize the use of the bank's resources and help to strengthen its capital base.