At the end of last year, the Chinese government announced a crackdown on overseas investment, with measures introduced to limit capital outflows in an attempt to protect the value of the country’s currency. Given that Chinese companies had been behind some of the biggest City of London office investments in the second half of last year, British developers could have been forgiven for worrying that the flow of money from the orient would be stymied.

Nerves were calmed when in March British Land and its joint venture partner Oxford Properties sold the landmark ‘Cheesegrater building to Chinese developer CC Land for £1.15bn. The sale of the Walkie Talkie to tycoon Lee Kum Kee followed in July, with the price of £1.28bn making it the biggest property deal ever recorded in the UK.

However, last month the Chinese government moved to further regulate overseas activity and took steps to reduce what it described as “irrational” acquisitions of foreign assets, including hotels and other properties. Almost immediately, news emerged that Chinese developer Dalian Wanda had pulled out of a deal to buy the £470m Nine Elms Square development site in Battersea, although the waters were muddied somewhat when it later emerged that an alternative buyer had been found in the form of a joint venture between Chinese developer R&F Properties and Hong Kong-listed CC Land.

While some industry watchers have speculated that any dip in investment volumes from mainland China will be replaced by funds from Hong Kong, others warn that the industry should brace itself for a sharp reduction in investment from both territories. Respected analyst Mike Prew, for instance, has speculated that the tap will be turned off, penning a note for investors entitled After the Mahjong Money, What Next?