The Spain global was heavily linked with a move to Old Trafford this summer and it was believed they had agreed personal terms with the 24-year-old.
United insisted Lukaku was their "principle target" this summer despite having been locked in negotiations with Madrid since it became apparent that Antoine Griezmann would not join at the start of June.
IBTimes UK had earlier revealed the Red Devils' were looking at the option of signing in Morata, who scored 20 goals in all competitions for Real last season.More news: Dow ends at 2nd straight record ahead of bank earnings
'Yes, we have had interest, that is obvious and it's public.
The Italian is eager to add the 24-year-old to his squad although the two clubs are yet to reach a financial agreement.
"They've identified for a long time that his development at Juventus, his training at Madrid and the fact that he's a consistent trophy victor at a very young age, meant that they thought he was the right player".More news: Kucinich: Trump Jr. Meeting Is a 'Bunch of Nothing'
Antonio Conte is of course facing other issues at the club, with Diego Costa's future still uncertain, and the fact of the matter being the Blues would not be in such a hard situation had Conte not had told Costa he had no future at the club, with the striker possibly staying for six months and then leaving for Atletico Madrid as he wanted.
With Chelsea losing out on Lukaku, they have turned their attention in signing Real's Morata.
"At the moment, Morata's mentality is still that he doesn't get the game time at Madrid, and although he'd like to triumph there, Chelsea are real contenders and they can afford him".More news: Trump to French first lady: 'You're in such good shape'
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