Dubai: Saudi Arabia’s Jabal Omar Development Co, one of the largest listed property developers in the country, plans to raise 4 billion riyals (Dh3.91 billion or $1.06 billion) with local currency sukuk issues, sources familiar with the matter said on Monday.

The company, which has taken out bank loans over the past few years to back its flagship development in Makkah, may start issuing the Islamic bonds over the next few months, sources said. It was not clear whether all the sukuk would be issued at one time or over a period of time.

Bank Al Bilad has been hired to arrange the fund-raising, but other banks are likely to have leading roles too, the sources added.

Bank Al Bilad and Jabal Omar Development did not respond to requests for comment.

The developer’s flagship project, Jabal Omar, is within walking distance of the Holy Mosque in Makkah. It includes commercial malls, residential units and hotels over an area of 230,000 square metres.

Saudi Arabia’s real estate sector was hit hard last year, with prices declining 8.7 percent, according to a government study, as a result of the government’s austerity measures after a slump in international oil prices.

Jabal Omar missed in January last year the first repayment, worth 650 million riyals, on a 3 billion riyal loan that it had obtained from a government entity in 2012 to develop the Jabal Omar area.

It amended the terms of the loan in February 2016 to postpone the effective date of the loan settlement and extend its grace period. The first payment on the facility is now due in 2019 and the loan will mature in 2024.

Jabal Omar has also borrowed 4 billion riyals through an Islamic loan from a commercial bank signed in February 2015. The first repayment of that loan is due in March next year, while the last installment is in 2029, according to the company’s latest financial report.

It also signed a syndicated loan with a credit limit of 8 billion riyals in September 2015 with two local banks. That loan has a 12-year maturity and a four-year grace period.

It is not clear whether the planned sukuk would be used as new funding or to refinance some of the company’s existing debt, but it is very likely that the bonds will be absorbed by the company’s existing relationship banks, the sources said.