DUBAI, (Reuters) – Nakheel, the state-owned developer of Dubai’s palm-tree shaped islands, said on Wednesday it would halt work on a kilometre (3,281-feet) tall tower for a year in the Gulf’s trade and tourism hub.

The planned skyscraper, part of the 140 billion dirham ($38 billion) Nakheel Harbour & Tower project announced in October, would be the world’s tallest tower once completed. The project includes 40 high-rises.

“Further work on the foundations of Nakheel Harbour & Tower will commence in 12 months,” a Nakheel spokesman said in an e-mailed statement. “The foundation works are likely to take approximately three years to complete.

“This is part of our readjustment of our immediate business plans, to better reflect the current market trends and match supply with demand.”

The suspension comes after Nakheel stopped work in December on Trump Tower, a $789.5 million project on one of the emirate’s palm-shaped islands.

In November, the developer said it had cut 500 jobs or 15 percent of its workforce.

A number of Dubai developers have cut staff, scaled back and reviewed projects as the global financial crisis hits the once-booming real estate sector of the Gulf emirate.

Dubai developer Emaar Properties is currently building Burj Dubai, a mostly residential high-rise that is expected to reach 800 metres (2,625 feet), though its ultimate height has been kept a secret.