ICD Property and Adelaide City Council announced on Thursday that the State Commission Assessment Panel (SCAP) had approved the development, which is expected to break ground later this year, with construction to take three and a half years.

The project will see the ageing Central Market Arcade demolished for new retail areas and a 38-storey office, hotel and residential building.

The approval came despite SA Housing Authority concerns that the development did not meet State Government criteria to consider affordable housing, as no Land Management Agreement had been signed.

But the council said the project did not require such an agreement and developers met its obligation by offering exclusively to eligible purchasers for a maximum of 90 days.

Lord Mayor Sandy Verschoor said ICD Property would deliver 15 per cent affordable housing – priced at less than $419,750 in line with a State Government affordable housing requirement.

She said the council hoped for “fantastic sales because we want a really diverse community living here”.

“This investment provides a unique opportunity to build on what people already love about the market district,” she said.

“We are excited to be part of ICD Property’s Adelaide’s flagship development, Market Square, building on the Central Market’s importance as a South Australian icon, and provide better connections to Victoria Square and the surrounding streets.”

Plans were unveiled in 2019 to demolish the existing arcade, which was last developed in the 1960s, and build a new two-level retail space and adjoining multi-storey tower with a hotel, apartments and offices.

Melbourne-based developer ICD Property will own and manage the central tower, named Market Square.

Dubbing it “a catalytic investment in the city,” the council said the development would “create a new social and commercial hub that will preserve and enhance the Central Market, and secure the future of the market district for future generations”.

“The new precinct will integrate office, residential, and retail spaces alongside a new hotel and an urban terrace – an elevated and vibrant garden retreat in the heart of the city – and will transform the way we move around and connect with each other,” it said.

BELOW: A marketing video released by the developers

ICD Property managing director Matthew Khoo said the redevelopment would focus on protecting and supporting the current public space.

“Market Square will be a celebration of the best of South Australia, and feature fresh new retail opportunities,” he said.

“The seamless connection and close partnership with the Central Market is a huge asset to this project, we couldn’t be more excited to help secure its heritage and to watch this precinct flourish in the years to come.”

Khoo said 15,000 sqm of office space, developed as part of the construction, would be managed by JLL and include seven levels of A-grade commercial space.

Market Square is expected to generate $135 million to the state’s economy and create more than 1000 construction jobs.

The Central Market Arcade development Gouger aspect. Credit: Woods Bagot (design) /Pointilism (render).

Current market traders are expected to remain open for business throughout the project.

Adelaide Central Market Authority chair Theo Maras said the body supported the redevelopment of an “already world class central market”.

“I’ve been coming here for many, many years – since I was five years old with my grandparents – and let me tell you its a very dear place to me,” Maras said.

“There will be no change to the market: it will continue to trade as its trading with an extension that’s going to be world class.”

He said the development had attracted new traders to the market, including Haigh’s, Gerwurzhaus, Skala Artisan Bakers and Angelakis Bros, with existing traders investing in expansions.

The council said that when completed, the project was anticipated to increase annual precinct visitor numbers by one million and provide greater access through Victoria Square, Grote Street and Gouger Street.