Property firm St Modwen was forced to writedown £21m ($27.5m, €24.7m) from the value of its key 57-acre Nine Elms redevelopment project following a fall in central London house prices.
Based on "recent transactional evidence" house sales had fallen by 3.75%, it said in its interim results covering the six months to the end of May.
Nine Elms development is one of the country's largest residential building sites, with 19 developers planning 20,000 new homes, shops, a flower market, offices and leisure facilities in Vauxhall.
However, concerns about the oversupply of luxury apartments in the area have been expressed by property agents.
The firm added its valuation of the site "is consistent with our expectations and demonstrates that market evidence does not support the level of negative sentiment expressed during the first half of the year towards Central London Zone 1 residential prices and Nine Elms in particular".
It also took a £13m one-off hit from the increase in Stamp Duty Land Tax, announced in the recent government Budget.
Profit before tax was £30m in the period, compared to £206m a year ago, although this was boosted by an £128m benefit from the revaluation of its Nine Elms redevelopment, called the New Covent Garden Market project.
The firm added that its trading profit of £34m this year was not far behind the record £35m trading profit it generated 12 months ago.