Sale of 7 Hotels in Europe

InterContinental Hotels Group PLC
13 July 2006

13 July 2006



                         INTERCONTINENTAL HOTELS GROUP

       SALE OF SEVEN HOTELS IN CONTINENTAL EUROPE FOR €634MILLION (£440m)



InterContinental Hotels Group PLC ("IHG") today announces it has agreed to sell
a portfolio of seven InterContinental branded hotels (2,537 rooms) located in
Continental Europe to the Morgan Stanley Real Estate Funds ("MSREF"). IHG
previously announced in January 2006 that these hotels had been put on the
market.



IHG has retained 30 year management contracts on the hotels, with two 10 year
renewals at IHG's discretion giving a total potential contract length of 50
years. These long term contracts ensure the representation of the
InterContinental brand in these important locations. IHG and MSREF have
separately reached preliminary agreement on converting further hotels comprising
up to 1,000 rooms to IHG's brands, and are exploring other opportunities where
IHG's brand family complements MSREF's asset portfolio.



The portfolio has been sold for €634m (£440m(1)) in cash before transaction
costs, approximately €80m above net book value of approximately €550m, with no
material tax charge arising. In addition, MSREF has agreed to make capital
investments in the portfolio for approximately €60m, including implementing new
brand initiatives and adding further facilities to these prestigious hotels.



The transaction is expected to complete in the third quarter of 2006, subject to
the satisfaction of certain conditions including EU merger clearance. Proceeds
received from the disposal will be used for investment, returns to shareholders,
and managing IHG's level of debt.



In 2005, these seven hotels generated revenues of €185m, EBITDA of €42m and EBIT
of €23m before management fees. Normalised management fees from the management
contracts are expected to be approximately €10m per annum going forward.



On completion of this transaction, IHG will have sold 175 hotels with a net
asset value of more than £2.8bn since separation from Six Continents in April
2003.  IHG has retained over 90% of sold properties under its brand flags, as
part of its strategy to grow its managed and franchised business and reduce
asset ownership. Aggregate proceeds received to date have been above net asset
value. IHG has announced the return of £2.75bn to shareholders, of which £2.6bn
has already been completed.



Andrew Cosslett, Chief Executive of IHG, commented:



"This deal is a significant step for IHG as we near the conclusion of our asset
disposal programme. MSREF is a highly respected real estate investor and will be
a strong business partner. We look forward to working with them and developing
our relationship. Looking ahead, IHG is fully focused on its growth target of
adding 50,000 to 60,000 rooms to our portfolio on a net and organic basis by the
end of 2008."



Struan Robertson, Managing Director, Head of Morgan Stanley Real Estate Europe &
Middle East, commented:



"With this transaction MSREF is extending its hotel investment business into
Europe. We are pleased to be working with InterContinental Hotels Group, and the
prestigious InterContinental brand, and look forward to expanding our
involvement with them around the world. At the same time we are establishing a
specialised hotel asset management platform to ensure the highest quality
interaction with our hotel operating partners across the region."





For further information, please contact:
Investor Relations (Paul Edgecliffe-Johnson):             [phone]


Media Enquiries (Leslie McGibbon):                        [phone]
                                                          [phone]


Transaction details:



1. The purchasing entity is a company ultimately controlled by MSREF.



2. The net book value of the assets sold was approximately €550m.



3. No material tax charge arises as a result of the transaction. A deferred tax
provision of approximately €120m in relation to the assets will be released on
completion.



Disposals announced today:


                                                                                        2005
                                                                                          €m
Revenue                                                                                  185
EBITDA*                                                                                   42
EBIT*                                                                                     23



*Before management fees


Hotel                                                                                      Rooms
InterContinental Amstel Amsterdam                                                             79
InterContinental Budapest                                                                    398
InterContinental Carlton Cannes                                                              338
InterContinental De La Ville Rome                                                            192
InterContinental Frankfurt                                                                   770
InterContinental Madrid                                                                      307
InterContinental Vienna                                                                      453
Total                                                                                      2,537



Note to Editors:



InterContinental Hotels Group PLC of the United Kingdom (LON:IHG, NYSE:IHG
(ADRs)) is the world's largest hotel group by number of rooms.  InterContinental
Hotels Group owns, manages, leases or franchises, through various subsidiaries,
over 3,600 hotels and 537,000 guest rooms in nearly 100 countries and
territories around the world. The Group owns a portfolio of well recognised and
respected hotel brands including InterContinental(R) Hotels & Resorts, Crowne
Plaza(R) Hotels & Resorts, Holiday Inn(R) Hotels and Resorts, Holiday Inn
Express(R), Staybridge Suites(R), Candlewood Suites(R) and Hotel IndigoTM, and
also manages the world's largest hotel loyalty programme, Priority Club(R)
Rewards.



InterContinental Hotels Group offers information and online reservations for all
its hotel brands at www.ichotelsgroup.com and information for the Priority Club
Rewards programme at www.priorityclub.com.



For the latest news from InterContinental Hotels Group, visit our online Press
Office at www.ihgplc.com/media.



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 $87.7
billion of real estate assets worldwide and currently manages $50.9 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 upwards of $26 billion in commercial mortgages
in 2005. For more information about Morgan Stanley Real Estate, go to
www.morganstanley.com/realestate.



Morgan Stanley (NYSE: MS) is a global financial services firm and a market
leader in securities, investment management, and credit services. With more than
600 offices in 30 countries, Morgan Stanley connects people, ideas and capital
to help clients achieve their financial aspirations.

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(1) Exchange rate as of 10 July 2006


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