Morgan Stanley Real Estate Invests Rs. 675 Crore in Oberoi Constructions in India

Mumbai —

MUMBAI, January 17, 2007 -- Morgan Stanley Real Estate announced that it has invested Rs. 675 Crores (approximately US$152 million) in Oberoi Constructions, a leading Indian real estate developer, focusing on residential, commercial, retail and hospitality projects.

Mr. Vikas Oberoi, Managing Director of the company, commented, “The pro-reform government policies combined with the globalization of the Indian economy has driven increased disposable incomes of the middle and upper middle classes, rapid urbanization and increased liquidity in the Indian markets.  As a result of this, the Indian real estate industry has seen and will continue to see exceptional growth for several more years.  Oberoi Constructions has been very passionate in building expertise across various asset classes and we intend to utilize this expertise to expand our geographic footprint across India.  We are very excited about our partnership with Morgan Stanley Real Estate, a leading global real estate investor, as this will allow us to further capitalize on this significant growth opportunity and at the same time provide us access to their global real estate franchise and relationships.”

Oberoi Constructions has executed over 30 projects primarily in Mumbai. The company has acquired large tracts of prime land across Mumbai and currently has a development pipeline of around 15 million square feet.

Anand Madduri, Executive Director and Asia Pacific Portfolio Manager for Morgan Stanley Real Estate’s Special Situations Fund III said “We are extremely pleased and privileged to announce our partnership with Oberoi Constructions, which we believe is a unique company with an entrepreneurial vision, strong value systems and one of the best in-class real estate developers in India.  This investment represents a continuation of our strategy to provide growth capital to companies like Oberoi Constructions with exceptional management teams and differentiated development capabilities across all real estate asset classes.  This investment is one of our largest equity investments globally and as such represents our commitment and belief in the continued success of Oberoi Constructions.  We look forward to working with the Oberoi Constructions management in growing the company, its overall franchise and the brand.”

Oberoi Constructions was founded in the mid-80s and is headquartered in Mumbai.  The company has been a pioneer in structuring, executing and developing various types of real estate assets. The company has an unblemished record of acquiring large tracts of land most of them being from Multinationals.  Oberoi Constructions has been a significant player in the niche segment of high-end apartments catering to High Networth Individuals.  Oberoi Constructions also pioneered possibly the first private equity transaction at an SPV level in the Indian real estate sector over 3 years ago.

Morgan Stanley Real Estate is comprised of three major global businesses: Investing, Banking and Lending.  Since 1991, Morgan Stanley has acquired $102.0 billion of real estate assets worldwide and currently manages $60.5 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 offering 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, go to www.morganstanley.com/realestate.

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 30 countries. For further information about Morgan Stanley, please visit www.morganstanley.com.