Dubai-based hospitality company Jumeirah Group has started speaking to banks about raising a AED1.2bn ($327m) loan to finance the expansion of its Madinat Jumeirah complex.

Talks are understood to be at a preliminary stage with a small group of banks, according to sources approached by the company.

“At this stage they are talking about finding someone to lead the deal, and a wider group of lenders could be approached at a later stage,” says one banker at a local lender.

Jumeirah’s plans to start trying to raise funding following the announcement in November 2012 that Ruler of Dubai Sheikh Mohammed bin Rashid al-Maktoum had ordered the launch of the AED2.5bn Madinat expansion. The expansion, known as Madinat Jumeirah Phase 4, will involve the construction of a five-star hotel, a villa complex and commercial space.

The company is one of Dubai’s best-regarded businesses and has seven hotels in the emirate along with properties in Frankfurt, Istanbul, London, Rome and Shanghai. It is aiming to have 30 hotels in operation by 2015.

The hospitality company is part of Dubai Holding, the investment firm owned by Sheikh Mohammed.

A spokesman for Jumeirah Group declined to comment.