* Dar Al Arkan eyeing $300 mln from sukuk sale - source

* Order book in excess of $500 mln - leads

* Early price talk of 5-yr sukuk at 6.25 pct

* Deutsche, ENBD, Goldman Sachs among sukuk arrangers

* First global bond from company since 2010

(Adds target size, dividend statement, writes through)

By Mala Pancholia and David French

DUBAI, May 20 (Reuters) - Saudi developer Dar Al Arkan

4300.SE could raise around $300 million through its first global debt issue in more than three years, aiming to secure funding to capitalise on opportunities in Saudi's real estate sector.

The company plans to raise a five-year Islamic bond and began marketing it to investors on Monday, ahead of pricing later this week, banks arranging the deal said in a statement.

Dar Al Arkan last tapped markets for a dollar sukuk in 2010, when it priced a $450 million deal at 10.75 percent. The paper

SA048532675= was bid at 110 cents on the dollar on Monday, according to Thomson Reuters data, to yield 4.6 percent, down from about 6.2 percent at the beginning of the year.

That previous transaction, the first ever bond from a Saudi entity available to investors in the United States, came at the height of a regional property slowdown and Dubai's credit crisis, which affected sentiment across the region.

Since then, however, there has been a recovery in the sector, boosted by prospects for a new mortgage law in Saudi, as well as rising demand for regional debt, which should allow Dar Al Arkan to substantially lower its funding costs.

Saudi is expected to experience a real estate boom once a long-awaited mortgage law, announced last June, is introduced. A shortage of low and medium-cost housing is a significant issue in the kingdom, with analysts saying Saudi needs to build up to 275,000 homes a year for the next five years to satisfy demand.

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Market talk puts the size of the latest deal at around $300 million, a banking source said on condition of anonymity. Early price guidance for the deal was for a yield of 6.25 percent, the statement added, with lead managers saying in a later update orders were in excess of $500 million.

Standard & Poor's earlier this month raised Dar Al Arkan's outlook to positive on its B+ rating, four notches below investment grade.

"Dar Al Arkan's upcoming sukuk should receive adequate demand in the 6.25 percent area," said Gus Chehayeb, director of Middle East and Africa corporate research at investment firm Exotix in Dubai.

Yet Chehayeb cautioned that the pricing could have been higher as there was concern in the market that Dar Al Arkan would follow the issuance with a generous dividend - which Dar Al Arkan ruled out in a separate bourse filing.

Shares in Dar Al Arkan closed down 6.3 percent after the dividend comment, having risen 14.4 percent in the first two trading days this week.

Banks arranging the sukuk were Bahrain-based Bank Al Khair, Deutsche Bank DBKGn.DE , Emirates NBD ENBD.DU , Goldman Sachs

GS.N and Qatari pair Masraf Al Rayan MARK.QA and QInvest.

(Writing by Rachna Uppal; Editing by Patrick Graham and David Holmes)

((davidj.french@thomsonreuters.com)(+971 4 362 5864)(Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))

Keywords: SAUDI DARALARKAN/