Major works on the $400 million project, which involves demolishing the ageing Central Market Arcade and building a new retail space and office, hotel and residential tower, have also been pushed back until June.

The council has increased its spend on the project by $9.3 million more than originally planned, contributing a total of $31.92 million plus GST.

Changes approved by the council at a confidential meeting last night include increasing the overall height of the Grote Street tower by two storeys – meaning it will now be 39-storeys high – and building an additional 21 apartments.

The council has also agreed to relocate residential car parks to the basement and to increase loading zones for traders.

A revised render of “Market Square”. Image: ICD Property/Adelaide City Council

Retail balconies will be built on the Grote Street façade of the building, and the podium rooftop space will be lowered from level five to level four.

Lord Mayor Jane Lomax-Smith told InDaily that the changes came about during discussions to improve the building’s air-conditioning system.

She said construction costs had also risen by more than 20 per cent, with major projects across the world currently hampered by supply chain issues and skilled worker shortages.

“There’s been a cost escalation and a change in the style of the fit-out and the council therefore has invested more money,” she said.

“At the same time, the cost escalation has forced the developer into making changes as well that they wanted and for their cost escalation they have chosen to put an extra two levels of residential accommodation on.

“There are lots of things happening at once and this is the compromise to allow everyone to proceed.”

Construction on the new building – to be called “Market Square” – was originally set to begin in 2021 ahead of an anticipated opening next year.

But the project’s timelines have been pushed back several times, most recently in November following a request from the Adelaide Central Market Authority to suspend work until February to avoid construction impacts on traders over Christmas.

Lomax-Smith told InDaily last month that major construction works would start in autumn, with the build to take about three years.

The council this morning announced that major works would start in June.

“It’s been delayed multiple times and the current delay is related to the requirement to get a building planning amendment because they’re putting extra apartments on the height and that requires development approval – not by Council but by SCAP (State Commission Assessment Panel),” Lomax-Smith said.

“We hope it would only take six weeks, but we have to understand that these things take time – we can’t hurry them.

“Therefore, conservatively, we’d say that within three months it should be ready to roll.”

A revised render of “Market Square”. Image: ICD Property/Adelaide City Council

InDaily contacted ICD Property CEO Matt Khoo for comment.

In a media release, Khoo said it was “no secret” that the construction industry was currently under pressure around the world.

He said ICD Property had been able to “safeguard Market Square from the worst of it”.

“We are thrilled to be partnering with the City of Adelaide to deliver this transformative development that will be a true source of local pride and a must-visit tourist destination,” he said.

“Adelaide is a fantastic city with a bright future and we couldn’t be more proud to be contributing to its success.”

The council estimates that the project will deliver a “$135 million boost to the South Australian economy”.

Once complete, ICD Property will own and manage the central tower, which will include the supermarket, residential, office and hotel component of the development, as well as an elevated 3000-square-metre public terrace.

The bottom floors will be connected to the Central Market and will include a range of food, wine and homewares shops, as well as restaurants, cafés and bars.

ICD Property has pre-sold over 96 per cent of the apartments and recently announced that HEI Schools had signed a 10-year lease to become the operator of Market Square childcare centre.

It is yet to announce which companies will run the supermarket and hotel.

According to ICD Property’s website, Market Square is “the fastest-selling project in Adelaide’s history”.

The developer claims it is also “set to break the record for most expensive Adelaide property”, with a penthouse priced at $10 million.

The Central Market will remain open for business while the arcade redevelopment is underway.

Central Market chairperson Theo Maras described the arcade redevelopment as a “one in a hundred-year opportunity to expand our iconic Market and ensure its future in the hearts and minds of the next generation of South Australians and all who do business and visit here”.