Adelaide City Council is contributing nearly $32 million towards the Market Square project – $9 million more than first planned – but said the development would be a $135m boost to the economy.

Work was originally meant to start in 2021 and be completed next year but the project was hit with a series of delays, including obtaining planning approval for amendments to add another two storeys and 21 apartments.

The council said in March that demolition of the ageing and now closed Central Market Arcade would begin in June.

Part of the now-closed Central Market Arcade. Photo: Max Opray/InDaily

Once complete, ICD Property will own and manage the central tower which will include a supermarket, apartments, offices, hotel and an elevated 3000 square metre public terrace.

Central Market Arcade redevelopment. Image: ICD Property

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.

Image: ICD Property

The council said residential parking would be in the basement and that loading zones for traders would be expanded. Retail balconies will also be built on the Grote Street façade of the building.

ICD Property said earlier this year that HEI Schools had signed a 10-year lease to become the operator of Market Square childcare centre.

ICD Property CEO Matthew Khoo said the partnership with Adelaide City Council would “create something truly transformative for the city, a source of real local pride and a must- visit tourist destination”.

“The commencement of demolition and construction works is a significant achievement we have long been working towards and we couldn’t be more excited to be making progress with Market Square and see the project moving forward,” he said.

“Interest in the residences has been phenomenal with more than 98% sold within their first few weeks of launch and an exclusive $10 million penthouse catching the eye of buyers around the world.

“We have in fact received so much overwhelming interest in the residences we have introduced two new floors of apartments that will launch to market in the near future.”

Lord Mayor Dr Jane Lomax-Smith said it was a “city-defining development for Adelaide that will breathe new life and vibrancy into the precinct”.

“This project is going to deliver enormous economic benefits for the city and is expected to create more than 1,000 new jobs,” she said.

“By developing around 20,000sqm of office space in a seven-level commercial tower there is also fantastic potential for increased activation of Adelaide’s CBD.”

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Builder Multiplex will build Market Square, which was expected to take around three years. The hotel operator, office tenants and main retailers are yet to be announced.

Adelaide Central Market Authority chair Theo Maras said the Adelaide Central Market will stay open throughout demolition and construction.

“The Market expansion will deliver more of what Adelaide already loves so much. More fresh food, more artisan products, more South Australian produce, more hospitality and more local wining and dining options,” he said.