The curbing measures only silenced foreign investors for a while in the middle of last year, but didn't make them lose confidence in China's market.

"Foreigners still feel upbeat about China's real estate market and offshore companies have shifted to equity investment as a way to enter the market," said Tian.

Unlike some veteran foreign investors such as Morgan Stanley's real estate unit, which is known for asset investment, newcomers like Warburg Pincus are using equity rather than asset acquisition as a way into the market.

Morgan Stanley often purchases office or residential buildings and sells after holding them for a short time.

Last year in Shanghai, it bought four apartment buildings from Lujiazui Central Palace for more than $87.5 million and also bought a residential building from Chateau Pinnacle for $95 million.

But US-based Warburg Pincus, one of the largest private equity investment firms in the world, is now taking the lead among its competitors in buying bigger stakes in Chinese developers in addition to its non-real estate businesses.

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