Construction costs on the Intu Watford redevelopment have increased by 80 per cent since 2014.
The construction value of the project now stands at £180m, up from £100m in September 2014.
Last July Intu said the cost to redevelop its Watford scheme had risen to £148m due to cost inflation driven by increasing construction demand in London.
The developer also said it had changed the scope of works for Intu Watford to include existing mall refurbishments and improved ancillary services, such as upgraded car parks.
Construction cost inflation is affecting projects across the UK – particularly in London.
Figures from Arcadis show average annual inflation in London peaked at 9 per cent in Q4 2014 and averaged around 7-8 per cent during 2015.
Arcadis has estimated the rate of inflation will fall to between 4 and 5 per cent in London during 2016.
Intu has yet to confirm the contractor appointed to carry out the main works package for its Watford scheme.
Bam Construction was carrying out preconstruction work but was replaced by Laing O’Rourke after it failed to agree terms with the client.