Morgan Stanley Real Estate announces recommended offer for Investa

Sydney —

Funds managed by Morgan Stanley Real Estate announced today that they have entered into an agreement to acquire Australian real estate company Investa (ASX: IPG) for an all cash price of $3.08 per stapled security, representing an enterprise value of approximately A$6.6 billion. The acquisition is subject to security holder approval and will proceed via a scheme of arrangement. Investa’s Board unanimously has recommended the offer to security holders, in the absence of a superior proposal and subject to the opinion of the independent expert.

The offer represents:

56% premium to stated net tangible asset value at December 31, 2006

23% premium to volume weighted average price over last 6 months

19% premium to volume weighted average price over last 3 months

13% premium to volume weighted average price over last 30 days

14% premium to the closing share price on May 30, 2007

Steven Harker, CEO of Morgan Stanley Australia, commented, “Over the last 15 years, our global real estate business has been focused on investing in gateway cities all over the world.  Investa’s portfolio, with its attractive assets in Australia’s major cities, is a natural extension of our global real estate investing strategy. We’re committed to creating and growing world class real estate companies which have large, active development programs.”

“We are pleased to have secured a recommendation from the Investa Board and we believe this offer represents excellent value for Investa security holders given the significant premium offered.”

“This offer is a continuation of Morgan Stanley’s strategy to increase its long term presence in Australia.”

David Gribble, Executive Director, Morgan Stanley Real Estate Australia, said, “Investa has some of the highest quality commercial and residential assets in Australia. Investa has a unique, synergistic business model which combines existing real estate assets, development and funds management capabilities that are highly complementary.”

“Morgan Stanley Real Estate is looking forward to working with existing Investa management and employees to grow the funds management business, the commercial and residential development businesses and the real estate asset portfolio. Morgan Stanley Real Estate views the Investa platform as a key component of growing its presence in Australia.”

The offer is cum distribution and will be reduced by the amount of Investa’s distribution for the half year ending 30 June 2007.

The implementation agreement details, among other things, conditions to the transaction, which include: FIRB approval, Investa security holder approval, Investa directors not changing or withdrawing their recommendation, no material adverse change occurring, and certain prescribed occurrences not occurring. Full details of these conditions are set out in the implementation agreement that was attached to Investa's announcement made today. The bid vehicle has committed funding for the purposes of the transaction from funds managed by Morgan Stanley Real Estate.

Note to Editors:

Morgan Stanley Real Estate

Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking and Lending.  Since 1991, Morgan Stanley Real Estate has acquired $121.5 billion of real estate assets worldwide and currently manages $55.6 billion in real estate assets on behalf of its clients. A complete range of market-leading investment banking services for real estate clients include advice on strategy, mergers, acquisitions and restructurings, as well as underwriting public and private debt and equity financings. As a global leader in real estate lending, Morgan Stanley has offered approximately $156.0 billion of CMBS through the capital markets since 1997, including $35.5 billion in 2006. For more information about Morgan Stanley Real Estate, please visit www.morganstanley.com/realestate.

Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services. The Firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 31 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.