The 23 year-old has registered 115 appearances across all competitions for Los Blancos since arriving at the Bernabeu in summer 2013, netting 17 times and helping them claim the 2014 Champions League title in the process.
But his place in the starting Xi is often dependent upon the fitness of Real Madrid’s more coveted names and reports from September claim the club would consider selling him in January if the right offer comes along.
Chelsea were linked with the Spain international earlier this week after manager Jose Mourinho was spotted in the stands during La Roja’s 1-0 win over Ukraine, with some sources alleging the west London outfit are now set to launch an enquiry.
Manchester City are also known long-term admirers through the Manuel Pellegrini connection. Isco claimed Europe’s prestigious Golden Boy award in 2012 under the Chilean at former club Malaga.
But Arsenal have been monitoring Isco’s situation for some time and according to The Metro, who cite Spanish publication Fichajes, they’re now working on a £22million deal.
However, Real Madrid’s valuation is believed to be significantly higher – somewhere near the £37million mark.
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