Deutsche Bank and Citigroup will advise on the planned flotation, two banking sources aware of the matter said, speaking on condition of anonymity.
The company, which develops luxury villas and apartments, said in April an IPO was one way to raise funds to ride a recovery in the development market following a crash in 2009. The developer, which was founded in 2002, scaled back on projects during the downturn but has now returned with new schemes.
A spokesman for Damac declined to comment but reiterated that the company was looking at all future growth possibilities. Deutsche Bank declined to comment. A spokesman for Citigroup in Dubai was unavailable.
A London listing would make Damac the first major property firm in Dubai to conduct an IPO since the emirate's property market imploded.