The developer said: “There are signs that increases in construction costs are moderating, reflecting lower raw material costs.
“However, tender prices still reflect limited capacity in the industry with contractors seeking to restore margins and limit their risk exposure.
“In central London, we are currently pricing in cost inflation of 5-6% per annum and for our projects under construction all our costs are fixed.”
British Land said its 2010 development programme is now complete and has generated a profit of £1.1bn on finished schemes.
The firm is currently on site with £825m of schemes and a new phase of development contains 1.3 million sq ft in the near-term pipeline.