Market Square developer dismisses fears over future of $400m development

The developer behind the $400m redevelopment of the Central Market Arcade has dismissed concerns about the future of the project amid fears of more delays.

Artist's impression of the Market Square development.

The developer behind the $400m redevelopment of the Central Market Arcade has dismissed fears about the future of the long-delayed project, claiming early construction work is back on track following delays caused by an asbestos find late last year.

Question marks about the future of the project have been swirling in property circles in recent weeks following promises in November that work on-site would recommence “in the new year” following the removal and clean-up of asbestos discovered during demolition works.

However given the slow start to the new year, with few workers found on-site most days, there are growing fears of more delays.

Industry sources have suggested a failure to secure tenants for the office component of the project is posing a challenge, and could push out timelines by several months.

“My understanding is that there are issues with the precommitment required for the office component of the project and that is holding things up,” one industry source, who declined to be named, said.

Artist’s impression of the Market Square development.

“The apartments are OK, the hotel is OK, but they need a level of office precommitment to make the project stack up and get it off the ground.”

Work on the Market Square project – a joint venture between Melbourne developer ICD Property and the Adelaide City Council – was originally meant to start in 2021 and be completed later this year.

But the project has been hit with a series of delays, most recently due to last year’s asbestos find and design changes that were approved close to a year ago.

However ICD chief executive Matt Khoo said site works had recommenced in January following remediation of the site, with construction of a piling platform the first step towards a ramp up in activity in the coming weeks.

“The complex earthworks program will continue until Easter after which a piling rig will arrive from interstate and the basement retention system will get underway,” he said.

“The basement and loading dock requirement for a project of this size is substantial. The loading dock itself needs to service the supermarket, 10,000sq m-plus of retail space, a commercial office building, as well as hundreds of hotel rooms and apartments.

“The significant size of the basement means that works will be happening below the surface, not visible from the street but rest assured there is plenty going on down there.”

According to latest estimates, the first stage of the project, including the office component and first-stage apartments are due for completion in 2025, ahead of a new retail offering and hotel in 2026.

The development will feature a hotel, 234 apartments, 21,700sq m of A-grade office space, a 11,000sq m-plus retail precinct and a 3000sq m elevated garden.

In March last year, the council approved an additional 21 apartments, more office space and two extra storeys, in a move viewed by many in the property industry as an attempt to bolster the project’s finances.

The amendments came after global construction costs rose by around 20 per cent, prompting council to increase its contribution to the project to $31.92m, $9.3m more than originally planned.