MetLife, AIG and Prudential are all understood to be in the running for the portfolio, which is being sold off by the Tchenguiz Family Trust.
Citigroup has been appointed to handle the sale, with freeholds of 250,000 UK homes up for grabs for investors.
The portfolio, which may be sold off as a single unit or broken down into smaller sections, had been pitched at sovereign wealth funds.
Now domestic investors such as insurers, reinsurers and pension funds are all in the running.
The portfolio, built up by Tchenguiz during the past two decades, has an average lease length of 60 years.
Around 40 per cent of it is focused in the southeast of England.
Tchenguiz was at the heart of a bungled investigation by Britain’s top fraud-busting agency the Serious Fraud Office (SFO) last year. In July he said he would seek damages and bring proceedings against the SFO for his arrest last year.
Interest in the portfolio is understood to have increased since the SFO case was dropped.