Press Release: LONDON 13 November 2006

Kandahar Group enters into £500m joint venture with Morgan Stanley Real Estate

LONDON, 13 November 2006 - The Kandahar Group, the London-based private property investment and asset management business, and Morgan Stanley Real Estate's MSREF V International today announce a new £500 million, 50:50 joint venture to be called Kandahar Real Estate Limited (“Kandahar”), to focus on UK retail and leisure schemes.

Kandahar's initial portfolio will include the 560,000-square-foot Drake Circus, Plymouth's first covered shopping centre, which opened on 5 October 2006 and was developed for Morgan Stanley Real Estate by P&O Estates Limited; and the Kandahar Group's 1,000,000-square-foot UK High Street property portfolio, valued at £243 million. The joint venture will provide Kandahar with enhanced resources to significantly increase the value of its property portfolio, by focusing on schemes with significant development opportunities.

About The Kandahar Group

Kandahar is a specialist property group focusing on strategic investments in the UK retail and leisure sector.

Having made its first investment in 2003, Kandahar Group has income in excess of £12m, and its investments consist of 13 UK retail schemes, including Tower Ramparts in Ipswich and Jackson Square, Bishops Stortford, and the Academy portfolio which comprises 22 UK High Street leisure and retail units with a focus on restaurant and licensed uses.

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 $91.6 billion of real estate assets worldwide and currently manages $53.9 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 approximately $28 billion in commercial mortgages in 2005. For more information about Morgan Stanley Real Estate, go to www.morganstanley.com/realestate.

Morgan Stanley 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.

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