Saudi Arabia's Al Othaim Real Estate and Investment Company, owner of five shopping malls in the kingdom, is marketing a five-year debut sukuk issue which could raise up to SR1 billion ($267 million) for the company, four sources aware of the matter said.

The firm, also known as Othaim Malls, is part of Al Othaim Holding, a family-owned conglomerate which includes listed food retailer Abdullah Al Othaim Markets Co.

Othaim Malls launched the transaction last week, with pricing earmarked at between 165 basis points and 175 basis points over the six-month Saudi interbank offered rate , according to the banking sources who spoke on condition of anonymity as the information isn't public.

A company source, who declined to be named, confirmed the sukuk was being marketed and said part of the proceeds would be used to fund its expansion plans.

Othaim Malls is building five malls, of which three are likely to be completed by end of this year, with the rest finalised by the end of 2016, as well as 16 entertainment centres, the company source added.

Two of the sources said applications from investors wanting to participate in the deal, which is secured against the firm's mall in Al Hofuf in the east of the kingdom, needed to be submitted by August 20.

The deal comes after sources told Reuters in June that Othaim Malls was looking to complete a transaction after the summer, having revived plans which had stalled the previous year.

The investment banking arms of Banque Saudi Fransi , Gulf International Bank and National Commercial Bank are arranging the transaction for Othaim Malls.  - Reuters