SYDNEY—Morgan Stanley Real Estate Investing hasagreed to sell a nine-property portfolio of Australian officeproperties to Chinese sovereign wealth fund CICInternational. Published reports value the acquisition ofMorgan Stanley's Investa Property Group realestate at A$2.45 billion, or US$1.79 billion.

The deal for 126 Phillip St. in Sydney and other office towersreportedly is the largest direct real estate transaction inAustralian history. It marks the debut in that country for CIC,which outbid more than 20 competitors, includingDEXUS Property Group and its partner, the Abu DhabiInvestment Authority, according to the Australian FinancialReview.

Investa Property's office holdings, which Investa Office willcontinue to manage, are just one aspect of an Australian realestate group that Morgan Stanley put up for sale this pastFebruary. Still up for grabs is the broader Investa platform,valued at about A$9 billion, or about US$6.6 billion. It includes amanagement portfolio of several office properties not covered bythe sale to CIC, as well as a development arm.