Sydney-based Metacap Developments said in a statement on Friday it had advised investors it would not proceed with the Empire Square project in Brisbane because of the worsening turmoil in the financial markets.
Metacap Developments director Jerome Chopard said the uncertainties and constraints in financial markets had impacted on the ability and willingness of banks to lend funds, especially for projects such as Empire Square.
"It is with regret, Metacap has been forced to a position where it must elect not to proceed with the Empire Square project," he said.
"Metacap had considered deferring the project to a later date, but decided this to be a less desirable outcome as it simply defers the uncertainty and doesn't give buyers the opportunity to make alternative choices."
Chopard said Metcap was considering its options, including a redesign of the tower.
Ben Langfield, from property marketer Colliers International, said while it was a disappointing decision it was the right thing to do.
Contracts have been terminated and the 10 per cent deposits will be released.
The 65-level tower was to be situated on a 2,000 square metre CBD site fronting Elizabeth Street.
Plans included a full-service hotel and residential apartment tower, housing 98 residential apartments, six penthouses and 306 luxury hotel suites.
The exclusive two and three bedroom residences were priced from $1.3 million.
The tower also included 23,500 square metres of office space over 23 levels.
Construction was due to start this year for completion in 2012.
Metacap Developments, which has offices in Sydney and Brisbane, was formed in 2005.
It is the development vehicle of Newell Palmer Securities, a Sydney-based financial advisory firm established in 1984, and Alex Jimenez, a Brisbane-based property developer.
