Real Madrid Transfer News: Latest Rumours on James Rodriguez and Pepe

Real Madrid star Pepe has reportedly agreed to a new contract with Los Blancos, snubbing the likes of Chelsea and Manchester City in the process, while James Rodriguez is said to be looking for a January exit.

According to John Cross of the Daily Mirror, an official announcement of a new, two-year contract for Pepe should arrive shortly, with the veteran agreeing to the new deal. Real have been locking up some of their top players to new deals in recent weeks, with the likes of Gareth Bale and Cristiano Ronaldo pledging their allegiance to the club.

Power Sport Images/Getty Images

The 33-year-old was always expected to follow suit, although his status as an impending free agent kept leading to transfer speculation. Pepe enjoyed a fantastic 2015-16 season and an even better showing at UEFA Euro 2016, as his home country Portugal won the tournament. Several clubs were keen to jump in if he and Real couldn't agree to a new contract.

With Raphael Varane waiting in the wings and Sergio Ramos firmly established as a starter, there were some suggestions Real could decline to sign the veteran to a new deal, but given his impressive form last season, it never seemed likely.

Here's a look at some of his highlights:

Injuries have been an issue for the Portugal international―he's been frequently sidelined with a number of knocks the last few years, per Transfermarkt.com―but when healthy, he still ranks among the best defenders in the world.

As shared by Jan Hagen of Sport Witness, he's on the list of nominees for UEFA's Team of the Year, and he's widely expected to make the XI:

Real have announced contract extensions days in advance throughout the season, turning the actual signing into a media event, so expect the club to confirm the news in the coming days.

Meanwhile, Sport's Alejandro Alcazar reported Rodriguez is eyeing a January exit, with manager Zinedine Zidane continuing to select other players over the Colombian despite the raft of injuries in Real's midfield.

Rodriguez came off the bench in the wins against Atletico Madrid and Leganes, while others, like Isco and Mateo Kovacic, have gotten chances to start and made the most of it.

Denis Doyle/Getty Images

Per the report, Zidane would prefer not to sell the 2014 FIFA World Cup hero, as Real's pending transfer ban means it would be impossible to bring in a replacement and register him for the foreseeable future.

Rodriguez's career in the Spanish capital took a turn for the worse after a promising first season with Los Blancos, and following the emergence of Marcos Asensio, a split seems all but inevitable.

The 25-year-old was regarded as one of the most exciting attacking midfielders in the world just two years ago, and in all likelihood, teams will be willing to spend big and invest in his potential should he become available.

Here's a look at some of his highlights:

Isco's recent surge may give Rodriguez hope that he too can turn his situation around, but if he continues to waste away on the bench, he'll have to make the decision to leave the club sooner rather than later.

He's too good not to play regular football entering the prime years of his career. With clubs always on the lookout for top talents, even a January move could be a possibility.