InterContinental Hotels Group has agreed to sell seven European hotels to Morgan Stanley Real Estate Funds for US$810 million.

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, according to the company.

The transaction is expected to be completed in the third quarter, subject to 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, according to the company.