These funds, some of which have been sitting on millions of pounds for over a year waiting for the right moment to buy, are looking at London where prices have fallen steeply in recent months and where the first signs of recovery are also expected.
One is British property investment team Raymond Mould and Patrick Vaughan whose venture, London & Stamford Property Ltd, is making its first move. It has bought a prime office building at One Fleet Place in the hard-hit City financial district of London for £74 million, about 45% less that it's estimated value in June 2007.
The company confirmed that it is looking at more properties and many announce another deal within a month. It believes that prices for UK stores and offices may not drop much further.
'I'm not saying that there won't be further falls. But there may not be much more to go below values estimated by appraisers,' said Vaughan.
'There are very few properties of this quality available at the moment. We are seeing a lot of distressed properties but we wouldn't describe them as opportunities. For us it is all about income security,' he added.
London & Stamford raised about £248 million pounds in November 2007 and has looked at more than 200 potential acquisitions. UK commercial property values fell 32% between their June 2007 peak and the end of November according to Investment Property Databank estimates.
It is estimated that these so called 'vulture' funds have been building war chest for the past five years in anticipation of a property bust. Mark Dotzour, chief economist for Texas A&M University's Real Estate Center, estimates that there is at least $130 million in vulture funds.
Much of the money in these funds comes from China and the Middle East. US firm Oaktree Capital Management is also rumoured to be close to finalising deals and have been looking in London.