The 29-year-old is an important member of Pep Guardiola’s first team and has played 20 times in the Premier League so far this season.
However Madrid are on the lookout for a long-term replacement for centre-back Pepe, who is expected to leave when his contract runs out in the summer.
And now Otamendi’s agent, Martin Sendoa, says the Bernabeu club have been monitoring his client ever since his time in Spain.
He told Radio Continental: “Nico has a profile similar to Pepe’s, who’d leave at the end of the season.
“Madrid have followed him since his time at Valencia, just like Barça, but it didn’t go any further.
“Nico is happy at City, but who wouldn’t like to play at Real Madrid , the biggest club in the world?”
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