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Nakheel Delays Work on World’s Tallest Tower

Nakheel PJSC, a state-owned company that’s considering an initial public offering, will resume work on the building in 12 months, according to an e-mailed statement on Wednesday.

The tower, comprising office space and homes, will have a height of 1 kilometre (3,280 feet).

“The foundation works are likely to take approximately three years to complete,” Nakheel said in the statement.

The company didn’t give a reason for the delay. Construction companies across the United Arab Emirates are finding it harder to finance developments and to sell real estate after a five-year surge in property prices ended last year.

Nakheel has $30 billion of projects under way, including islands in the shape of a world map off the coast, and has already said that some of the building work will take longer than planned.

“The project was at an early stage, so it’s not difficult to put on hold,” said Sana Kapadia, an analyst at EFG-Hermes Holding SAE in Dubai.

“Even 12 months may be too short a delay.”

Dubai already has the world’s tallest building, which is still under construction.

The Burj Dubai tower, being built by Emaar Properties PJSC, currently has a height of about 780 metres (2,559

feet).

Emaar hasn’t said how tall the completed tower will be.

The emirate may be the most vulnerable place in the Gulf as crude oil and real-estate prices decline, Citigroup Inc. said on November 18.

Dubai may need help from the neighbouring emirate of Abu

Dhabi to fund a surge in borrowing, according to Moody’s Investors Service.

Amlak Finance PJSC and Tamweel PJSC, the United Arab Emirate’s two biggest mortgage lenders, were merged with two Abu Dhabi-based banks in November as part of a consolidation plan, after the seizure of global credit markets shut their access to new funds.

Nakheel plans to cut its workforce by 15 per cent as the company scales back projects, according to an announcement in November.

In October, the investment company controlled by Saudi billionaire Prince Alwaleed bin Talal announced its own plan to build a 1 kilometre building, in the Red Sea city of Jeddah.