Market Square’s $200m office tower hits the market
The developer behind a $600m redevelopment of Adelaide’s Central Market precinct is looking to sell off one of its towers under construction at the site.
The developer behind a $600m-plus redevelopment of Adelaide’s historic Central Market precinct is gearing up for a sale of an office building under construction at the site, in what’s shaping up to be the biggest test of the city’s office market since the pandemic.
Melbourne’s ICD Property and the Adelaide City Council are partnering on the Market Square project, which will include a residential tower with 234 apartments, hotel, A-grade office building, new market hall and elevated garden space.
CBRE has been engaged by ICD Property to sell the office component of the project after the developer secured pre-commitments across 57 per cent of the building’s 23,000sq m of office space, from tenants including national law firm Thomson Geer and several state government departments.
Construction of the nine-storey tower is due for completion towards the end of 2026.
Industry sources suggest it could fetch offers in excess of $200m, which would potentially be the biggest office deal in Adelaide since Mapletree’s $202.7m acquisition of ANZ House on Waymouth Street in 2018.
Singapore’s Mapletree is currently pitching ANZ House to investors as part of a sell-down of its Australian office portfolio.
Market Square is the first project in Adelaide for ICD Property, which is partnering with Singapore’s First Sponsor Group on the $800m redevelopment of Sydney’s City Tattersalls Club on Pitt Street.
Chief executive Matt Khoo said Market Square was designed to “meet the future of work”, and was one of the few projects nationally to integrate office, retail, residential and hotel offerings within one site.
“This is more than an office building – it’s a workplace within a thriving community,” he said.
“For ICD, it’s about creating buildings that stand the test of time and leaving a legacy for the community. Our vision for Market Square is to deliver a world-class precinct, complementing the iconic Central Market that is so important to the livelihood of the City of Adelaide.”
Earlier this year, Adelaide fund manager ICAM struck a deal to acquire a new retail hub under construction at Market Square, including a new Coles supermarket, and a mix of retail, medical and hospitality operators across two upper levels above an expanded market area.
The market itself, one of the oldest in Australia with roots dating to 1869, will be retained and managed by the Adelaide City Council and Adelaide Central Market Authority.
Up to 53 market stalls, kiosks and other retail tenancies are being created to support an expanded market precinct on the ground floor.
Adelaide’s CBD office market has held up better than many other capital cities – due in part to a limited pipeline of new developments – but big ticket office transactions have remained sparse since the pandemic.
Market Square is one of just three major office towers under construction in the city, with Kyren Group’s new tower at 50 Franklin Street nearing completion, and early works under way at Walker Corporation’s second tower at the Festival Plaza precinct.
The city’s vacancy rate fell from 16.4 per cent to 15 per cent in the six months to July – the third consecutive decline according to Property Council figures.
CBRE senior director Ian Thomas, who’s selling the Market Square tower alongside colleagues Alistair Laycock and Flint Davidson, said the sale came amid renewed interest in the SA property market.
“With near zero vacancy in the Gen 3 submarket and strong demand driven by industries such as defence, the tower offers a compelling long-term investment with excellent return metrics,” he said.
“Investors are recognising that best-in-class buildings in activated mixed-use precincts will deliver both stability and growth.
“We’re seeing capital eager to enter SA, drawn by the state’s strong economy and the long-term demand profile created by defence, energy, medical and technology industries.”
Expressions of interest in the Market Square office tower close on October 9.
Originally published as Market Square’s $200m office tower hits the market
SA tech giant slapped with hefty fine over years of missing reports
