Hang Seng Sells Central Property to Morgan Stanley Real Estate

Hong Kong —

Hang Seng Bank today signed an agreement to sell its property located at 77 Des Voeux Road Central to a consortium led by Morgan Stanley Real Estate’s MSREF V International for a consideration of HK$2.258 billion.

Morgan Stanley Real Estate, together with local partners Gateway Capital and Pamfleet, outbid other interested parties to win the tender which closed on 26 April 2006. The transaction is scheduled for completion by 9 August 2006.

Built in 1962, the 23-storey building, which is adjacent to the Bank’s head office, has floor space of approximately 260,000 square feet. Approximately 116,000 square feet, or more than 40% of the area, is occupied by the Bank’s business and back-office departments.

The Bank will lease back the area it now occupies from the consortium for no more than 18 months after completion of the transaction. Hang Seng is negotiating to lease a large site for use after the expiry of the leaseback period.

Mr Raymond Or, Vice-Chairman and Chief Executive of Hang Seng, said, “As part of our ongoing plan to rationalise the Bank’s property portfolio, the disposal of the building will maximise the use of our resources and help to strengthen our capital base. Moving some of our operations to a mega site outside Central will also help enhance our operating and cost efficiency.”

Mr Alasdair Morrison, Chairman of Morgan Stanley Asia, said,” We are pleased that the MSREF-led consortium won the bid to acquire this prime office tower in Central. We look forward to working with our partners to refurbish and reposition the building and to holding it as a long-term investment.”

The acquisition of 77 Des Voeux Road Central marks the third major acquisition in Hong Kong for Morgan Stanley Real Estate this year, following the HK$960 million acquisition of Shama, one of Hong Kong’s leading providers of luxury boutique serviced apartments, and the HK$655 million acquisition of 139 Queen’s Road Central, a grade A office building.

In the past five years (2001-2005), Hang Seng has disposed of 17 old or non-core properties with a total floor area of about 172,000 square feet for a combined consideration of close to HK$500 million.

Hang Seng Sells Central Property to Morgan Stanley Real Estate/2

Media enquiries to:

Hang Seng Bank

Cecilia Ko (852)2198-4227 e-mail: ceciliako@hangseng.com

Morgan Stanley

Po Ling Cheung (852)9863-6365 e-mail: poling.cheung@morganstanley.com

Nick Footitt (852)2848-6847 e-mail: nick.footitt@morganstanley.com

Note to editor:

About Hang Seng Bank

Founded in 1933, Hang Seng Bank is a principal member of the HSBC Group. It operates 150 branches and automated banking centres in Hong Kong; a branch in Macau; and a network of 12 mainland China outlets, including six branches (in Beijing, Shanghai, Guangzhou, Shenzhen, Fuzhou and Nanjing), four sub-branches (three in Shanghai and one in Shenzhen) and two representative offices (in Xiamen and Dongguan). The Bank also has a representative office in Taipei.

With consolidated assets of HK$580.8 billion at the end of 2005, the Bank reported a profit attributable to shareholders of HK$11.34 billion for 2005. For further information on Hang Seng, please visit the Bank’s website at www.hangseng.com.

About Morgan Stanley Real Estate

Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking, and Lending. Since 1991, Morgan Stanley has acquired US$77.5 billion of real estate assets worldwide and currently manages US$43.1 billion in real estate assets on behalf of its clients. In addition, Morgan Stanley Real Estate provides a complete range of market-leading investment banking services to its clients including advice on strategy, mergers, acquisitions and restructurings, as well as underwriting public and private debt and equity financings. Morgan Stanley is also a global leader in real estate lending and, using its own capital, originated upwards of US$26 billion in commercial mortgages in 2005. For more information about Morgan Stanley Real Estate, go to www.morganstanley.com/realestate.

Morgan Stanley (NYSE: MS) is a global financial services firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 30 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.

About Gateway Capital

Gateway Capital is a real estate investment and management company established by Goodwin Gaw and Kenneth Gaw, with Pioneer Global Group as a strategic partner. Gateway China Fund I (“GCFI”), with committed capital of US$198.9 million from its investors, is a real estate investment vehicle established and managed by Gateway Capital. GCFI invests in real estate assets in mainland China, Hong Kong, and Macau.

About Pamfleet

Pamfleet is an independent, privately owned company providing real estate investment and development advisory services throughout Asia.