April 7, 2011 / 5:12 PM / 8 years ago

Morgan Stanley fund in $640-mln hotel sale-sources

* Fund selling European hotels to Toufic Aboukhater -sources * Sale for about 450 mln euros could close Monday -source

* Portfolio includes landmark Carlton hotel in Cannes

LONDON, April 7 (Reuters) - A Morgan Stanley (MS.N) fund is selling seven European hotels, including the Carlton in Cannes, to a Lebanese businessman for about 450 million euros ($643 million), two people familiar with the matter said on Thursday.

Toufic Aboukhater, who has owned the Grand hotel in Monte Carlo and the Dorchester in London, is close to completing the purchase from Morgan Stanley Real Estate Fund (MSREF) VI, the people said. One said it could close as early as Monday.

The portfolio contains Intercontinental-branded hotels in Vienna, Amsterdam, Madrid, Rome, Frankfurt and Budapest in addition to the landmark Carlton hotel. The likely sale was reported by Property Week on Friday.

Morgan Stanley was one of the most aggressive investors in global property markets during a debt-fuelled boom that soured in 2008.

Last year the Financial Times and Wall Street Journal said the $8.8 billion MSREF VI fund suffered as much as $5.4 billion of losses due to the global property-market slump.

Intercontinental Hotels Group Plc (IHG.L) sold the portfolio to MSREF for 634 million euros in 2006.

Cedar Capital, a hotel investment firm, is advising Aboukhater on the deal, one of the people said.

Morgan Stanley and Cedar Capital declined to comment. Reuters could not reach Aboukhater for comment. (Reporting by Quentin Webb and Karen Foster; Editing by ) ($1=.6996 euros) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)

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