Derwent confirmed its development pipeline in interim results which also highlighted rising construction costs.

The company said: “In the last two years we have highlighted rising construction costs, and these have continued to escalate.

“As a result we have increased our estimates of development capital expenditure, and, in some instances where premiums have become excessive, to move away from fixed price contracts.

“We expect to see construction cost inflation remain high for at least the next two years at c.10% per annum.  To date, rising rents and falling yields have ensured our profit margins have at least been maintained.”

Commenting on its work pipeline, Derwent said: “We are maintaining our growth prospects by initiating new projects.

“We commenced on site at The Copyright Building, 30 Berners Street W1 during the period, whilst  80 Charlotte Street W1 and Brunel Building, Paddington W2 (previously 55-65 North Wharf Road) will start in the second half of this year and the first half of next, respectively.

“Upon commencement we will have over one million sq ft under construction.

“Looking beyond the immediate future we have made progress on two major longer term schemes at 1 Oxford Street W1 and 19-35 Baker Street W1.

“After allowing for our 55% interest in the second property, Derwent London’s share is expected to be over 400,000 sq ft of development, which could start in 2018.

“For the longer term we have secured two large Tech Belt opportunities: 20 Farringdon Road EC1 and Aldgate Union E1.

“The purchase of the latter will complete in December 2015. Together these will cost £232m, and we will adopt similar strategies for both.

“In the short term the properties will benefit from our asset management activity and their proximity to Crossrail and, in the longer term, they will add to our significant pipeline of potential major schemes for beyond 2020.”

Derwent made a pre-tax profit of £405 for the six months to June 30 2015 compared to £371m last time.