DUBAI - Yields on $500 million of Islamic bonds issued by Qatari real estate developer Ezdan Holding and maturing in 2021 have jumped by about 2 percentage points after Standard & Poor's downgraded the company to junk on Monday.

S&P cut the Qatari company by two notches to BB from BBB-minus and revised its outlook to negative from stable. The rating agency cited a weakening of the company's financial risk profile, partly caused by a deterioration of Qatar's operating environment after some neighbouring Arab countries imposed a boycott on it.

Ezdan's sukuk, issued in 2016, were yielding around 6 percent at the market's close last week; the yield has surged to over 8 percent, Tradeweb data showed on Tuesday.

The company made another $500 million, five-year sukuk issue in April this year. Yields on that bond have climbed from around 6.5 percent at the end of last week to 8 percent.

The sanctions have worsened a slump in Qatar's real estate market. Housing and utility prices sank 4.7 percent from a year ago in September, their biggest drop for at least several years, and fell 0.7 percent from the previous month, official data shows.

(Reporting by Davide Barbuscia; Editing by Andrew Torchia) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))