Real Madrid midfielder Isco has revealed that he is "adjusting well" to life with the capital outfit.

The 21-year-old, who joined Madrid from Malaga this summer, is also confident that the club will challenge for trophies in the new campaign.

"I'm happy with the work we are doing. It's early but we have a great team with great players and a very good attitude. We are on the right track," he told the club's official website.

"I'm happy and adjusting well. I still need to build understanding with teammates but I am doing that in every training session. The team's quality is impressive and that is important. The way the team plays is more important than individual players.

"We are a young team with a future. What [Carlo] Ancelotti asks is for us to play well, play creatively and keep the ball."

Isco reportedly rejected Manchester City to join Carlo Ancelotti's side this summer.