Hong Kong's office market has seen another major deal with the announcement by a Singapore-listed real estate investment trust (REIT) that it has sold the office block at the Festival Walk complex for HK$1.96 billion.

The sale by Mapletree Pan Asia Commercial Trust came as part of efforts to optimise its portfolio amid the sluggishness in the office real estate market on the mainland and in the SAR.

The trust, which is backed by Singapore's state investment group Temasek Holdings, said it had agreed to sell the four-storey office building at the complex in Kowloon Tong at a price that matches its latest independent valuation.

With no details released regarding the buyer's identity, local media, citing sources, reported that the buyer was the City University of Hong Kong, which has its main campus across the street from the Festival Walk complex.

City University of Hong Kong said it had no comment regarding the matter.

In a statement, the trust noted that the deal, to be fully settled in cash, was expected to be close by February and came after its exit from two commercial office complexes in Japan in August as part of an effort to streamline its portfolio and shore up balance sheet flexibility.

Proceeds from the transaction, which covers 213,982 square feet of office space, will be used to pare debt, trimming the firm's leverage to about 36.5 percent from 37.6 percent, it added.

But the trust also noted it would retain full ownership of Festival Walk's retail mall, which is almost fully occupied and valued at HK$21.78 billion, though the mall element would be the sole Hong Kong asset in its portfolio after the deal.

The sale comes just one day after Lai Sun Development said it had agreed to sell its 50 percent stake in an office tower in Central to mainland e-commerce giant JD.com for HK$3.5 billion.