Elbtower was designed to be the tallest building in Germany outside of Frankfurt, but a faltering economy in the country and trouble in the construction industry now means that the future landmark of Hamburg could be torn down before it is ever finished.
Germany has become the world’s worst-performing major economy, as panicked companies slash their investment plans in the country.
The Elbtower, with a construction cost of nearly a billion euros (£814 million), was projected to open in 2026.
However, Signa Holding, the real estate company in charge of the project, declared insolvency earlier this month.
The state-of-the-art 254-metre-high skyscraper. designed by British architect David Chipperfield, would have included a 188-room NOBU hotel, restaurants, and 100,0000 square metres of shops.
Signa Holding has blamed soaring construction prices and interest rates for the crisis, amid wider economic shocks impacting the German economy.
Signa Holdingo is a symbol of “the emergency situation in the German real estate sector”, according to Frankfurter Allgemeine Zeitung.
The German newspaper pointed to the recent insolvencies of other well-known real estate companies, including Devello, based in Hamburg, and Centrum Holding, based in Düsseldorf.
Vonovia, one of the large rental housing companies, also recently announced that it would stop building new houses.
As construction grinds to a halt, the German Real Estate Federation (ZIA) estimates that in 2025 there will be 700,000 homes “missing from the market”.
German GDP is estimated to shrink by 0.4 per cent this year, according to the latest forecasts.
This comes after a landmark German constitutional court ruling left the Berlin government with a €60bn (£51bn) hole in its budget.
The court ruling blocked the transfer of unused funds from the pandemic to green investment.
German Chancellor Olaf Scholz vowed Tuesday that his government will work “as fast as possible” to solve the crisis.
VP Bank Chief Economist Thomas Gitzel warned that the government would likely have to enact austerity measures, which could further hurt economic growth
A business survey of 100 German companies last month found that a third of them were planning to move their businesses abroad in the next year.