Though the company didn't identify the locations of two properties in Shanghai, industry insiders speculated that they would be the Lujiazui Central Apartment in Pudong and Chateau Pinnacle in the former French concession area that Morgan Stanley purchased earlier this year.

Shama, which owns and operates five luxury boutique properties in Hong Kong now, aims to have 25 properties throughout Asia within five years, approximately 75 percent of which will be in Hong Kong and on the Chinese mainland.

In April, Morgan Stanley Real Estate Fund acquired an undisclosed majority stake in Shama from Macquarie Real Estate Asia-advised Schroder Asian Properties Fund.

"Asia's serviced apartment sector is highly fragmented," said Zain Fancy, executive director and head of Morgan Stanley Real Estate in Asia Pacific. "MSREF and Shama will look to build a strong regional serviced apartment brand focusing on gateway cities in Asia, especially in China."

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