IWG’s franchise programme is rolling out across the world as demand for flexspace continues to grow from both local startups and global companies – Iceland is just one successful example
Five years ago, Regus opened its first flexspace in Iceland. At the time, the concept of flexspace was in its infancy in the Nordic nation – it was virtually unknown, and far less widely adopted compared with other areas in Europe.
Fast-forward to today, and Regus has quadrupled its presence in Iceland to four Regus Centres – with around 270 private offices in total – to meet demand from both local and overseas businesses. The newest centre opened just under a year ago in the capital of Reykjavik, along Borgartún, a street that comprises the financial centre of Iceland. Regus Reyjavik Hofdatorg is experiencing such high demand, there are now plans to expand it (it will hit 90% occupancy by the dawn of 2020).
Iceland’s bounce-back from the 2008 recession is part of the reason the flexspace industry has taken off and why the franchise business opportunities for flexspace are so exciting. The financial crisis spurned a need for ingenuity, and for Icelanders to forge their own entrepreneurial paths. As a result, Iceland’s startup ecosystem has exploded. It’s widely reported that Iceland’s tech startups raised more funding per capita than any other European country over the past five years. And, where there are startups, there is demand for flexspace. Cost-efficient office space, available on shorter leases, with the option to upscale or downsize the amount of space in line with growth prospects (something that’s extremely hard to find with traditional office space) make for an attractive proposition.
It’s not just national startups that are fueling the demand for flexspace in Iceland. Large international companies seeking to expand into the Nordic nation are building flexspace into their strategy. Iceland’s desirable location – with easy access to Europe and North America – combined with its cost-efficient operational environment, skilled workforce and lively tech scene are attracting businesses from myriad sectors to set up shop. And flexspace is a sensible way for companies to enter a new market at lower risk with less of a long-term commitment, and agility to tweak their workspace set-up as needed.
One of these companies – based at Regus Reykjavik Armuli – is the engineering company Orbicon Arctic, which has a presence in Denmark, Sweden, Greenland and Iceland. “The branch here in Iceland started two years ago,” says Ármann Halldórsson, Head of the Iceland section for Orbicon Arctic. “The location at Regus Reykjavik Armuli is good – there are hotels, companies, shops and restaurants.”
When expanding into Iceland, Orbicon Arctic wanted to move into a ready-made business community. “Being a small company, it’s good to have people around,” says Halldórsson. “If there were a few of us in an office somewhere, it would only be us, but here we are in contact with different kinds of people – law firms, psychologists, people in advertising. It makes the dynamic better, more diverse – you can grab a coffee and meet someone new.”
The option to upscale or downsize was also an important reason why Orbicon Arctic chose a flexspace location for their Iceland debut. “We can increase or decrease the amount of workspace we’re using – if an employee leaves, for example, the space they were using can be cancelled by the time they’ve served their notice,” says Halldórsson. “So it’s very convenient for us to be flexible like that.”
IWG’s decision to roll out its franchise model across the nation is part of a wider global strategy that has identified franchising as the most effective way to expand at scale. According to CEO Mark Dixon, it comes down to forging long-term relationships with partners who understand the local neighbourhoods in which they operate. “In order to achieve the goal of national coverage – every town, city and suburb – it has to be done with partners,” Dixon said. “For us, those partners are franchise partners, building-owner partners and investor partners.” Over the coming years, as entrepreneurs seek workspace where they can grow, and international companies seek a low-risk, agile strategy for expanding into this attractive market, wherever they are, the demand for flexspace will only grow.
Find out how we can support your franchise business