Emerging markets specialist Gramercy, which made big profits a year ago on distressed developer debt in China, has scented an opportunity to repeat the trick and has bought back into the sector.

Robert Koenigsberger, founder of the Greenwich, Connecticut-based investment firm, told the Financial Times that distressed bonds of Chinese developers such as Country Garden, which currently trade at a liquidation price of about 8 cents on the dollar, could triple in value when a restructuring was completed.

“It’s a good time for select names in Chinese real estate. It is 25, 30 per cent of [gross domestic product] and it’s not going to disappear,” said Koenigsberger. “In order for that sector to survive, it is going to need access to financing and the path to financing is through debt restructuring, not liquidations.”