In a European property market marked by a sharp decline in deal activity, there is one group of players taking advantage of falling prices and the squeamishness of many buyers: German open-ended real-estate funds.

The cash-rich German funds, which target primarily individual investors, have been making purchases in places such as London, Paris and Moscow. Deka-ImmobilienGlobal, one of Frankfurt-based DekaBank Group's five such funds, recently bought an office building in the City of London, 50 Finsbury Square, for €113 million ($175.6 million). TMW Immobilien Weltfonds, another fund, plans to close on a prime office building in the City for £80 million ($157.3 million) in June.

The apparent good timing of the funds is part design and part byproduct of a crisis in their industry in the not-too-distant past. Now, with the credit-market crunch and property slump in parts of the globe, the funds are getting their chance to pounce.

German open-ended property funds "have an extraordinarily large amount of cash at the moment," said Michael Haddock, director of Europe, Middle East and Asia research at real-estate-services company CB Richard Ellis. He estimates the funds hold about €22 billion in cash of the more than €86 billion of assets under management, thanks to new equity and portfolio sales.

Because the funds haven't been able to compete on price with the highly leveraged buyers that in recent years dominated the market, he said, "they found difficulty in spending it until recently."

In the first quarter, German funds spent about €2.85 billion on property in Europe, according to commercial-real-estate services firm Cushman & Wakefield. At the same time, the 43 open-ended real-estate funds collected €3.1 billion in new equity, according to BVI, the German investment and asset-management association. In contrast, the London-based Association of Real Estate Funds reported net outflows of £500 million in the first quarter from the 63 British property funds it represents, most of which are geared toward institutional investors.

German open-ended real-estate funds are marketed as low-risk, low-return investment vehicles. The funds, which generally focus on buying properties with a sustainable rental income, have returned an average of 4% a year over the past 10 years, according to BVI.

With lower return targets, the funds use less debt than many other property buyers, often only 30% to 40% of a purchase, so they aren't as affected by the tightened credit conditions, said Michael Rhydderch, head of the cross-border capital-market team at Cushman & Wakefield in London. In recent years, highly leveraged, opportunistic funds have used from 80% to as much as 100% debt to buy property.

In addition to new equity, the German open-ended real-estate funds have cash from portfolio sales, property consultants said. Since 2006, the funds have sold €27.8 billion of property and bought €16.9 billion of property, said Marcus Lemli, head of capital markets in Germany for property-management and brokerage firm Jones Lang LaSalle in Frankfurt.

Those property sales were largely the result of the crisis the funds had in 2005 and 2006, when investors lost confidence in how they were valuing assets and withdrew billions of euros. With net outflows of €3.4 billion in 2005 and €7.4 billion in 2006, many of the funds needed to sell assets to raise cash, according to Sonja Knorr, a senior analyst with Scope Analysis, a Berlin firm that rates investment products.

In retrospect, those sales proved to be a blessing. Many of the funds took advantage of strong international interest in the German property market to sell off big real-estate packages at favorable prices. They realized substantial gains and ended up with a healthier mix of properties. Improving performance, coupled with the stock-market decline, lured back investors, Ms. Knorr says.

Meantime, the broader market for commercial property in Europe weakened as the credit crunch intensified. The value of property transactions completed in Europe during the first quarter was down 37% from the year earlier to €38.7 billion, according to Cushman & Wakefield.

One place where the funds' new buying power has been noticeable is the U.K., where, according to the Investment Property Databank UK Property Index, the value of commercial property has declined by 17% in the year ending in March. In the first quarte, German real-estate funds accounted for about 40% of the £972 million of investment in the City, according to Deborah Hayward, a senior associate at London property consultant King Sturge.

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