Flexible workspace and office provider IWG had a successful 2022 and will open nine new Canadian sites in the first part of this year as it looks to grow by 100 locations – to 250 sites – during the next three years.
IWG experienced major growth in Canada from 2014 to 2019, but offices in the country reopened more slowly from COVID-19 restrictions than in some other territories.
IWG Americas chief executive officer Wayne Berger told RENX that — while recovering more slowly in Toronto, Montreal and Ottawa — the overall business rebounded so well last year demand for flexible workspace has increased by about 30 per cent from pre-pandemic levels.
IWG opened nine Canadian sites in 2022 and is focusing on expansion in secondary, tertiary and suburban markets in which it had no, or minimal, presence.
“People are working in a more geographically disparate way than ever before and only coming into a company’s corporate headquarters when it's necessary,” said Berger. “So the accelerated demand that we're seeing is due to the changing nature of how people are able to live and work differently today.
"People are able to live in cities like Cambridge, Truro and Saskatoon and work for companies based in Toronto and Vancouver.”
Alternative for companies reducing real estate
The company, which is headquartered in Switzerland, works with 83 per cent of Fortune 500 companies, many of which are rationalizing their real estate portfolios.
It doesn’t make sense, according to Berger, for some of these firms to lock into a 10-year lease for a single large office footprint and spend millions of dollars on renting, furnishing and managing it.
“They're now giving their team members access to 20, 30 or 50 locations that make sense for them,” Berger said.
“That ability to be untethered from one location and use technology to work from whatever physical location they need to has become a real game-changer for these companies.
"It's shifting how people in companies are using space.”
IWG has approximately 3,500 locations in 120 countries, with 1,000 new centres due to be added over the next year.
It’s aiming to attract a variety of landlords — including real estate investment trusts, investors, property management companies, banks and asset managers — as part of its ambitious growth plans.
Berger said 90 per cent of the new sites IWG is launching for its flexible workspace brands — including Regus, Spaces, HQ, No18, Signature and The Wing — are in partnership with building owners and institutional developers.
When deciding what brand to open in a particular location, Berger said it looks at factors including: the type of building and size of space; the market and what IWG already offers there; the local competition; the capital investment the building owner is willing to put into the space; and the price point that would be the best driver for success.
Canada’s first four HQ locations
IWG will open its first four HQ locations in Canada this year:
- Queens Realty Limited is the landlord partner in the 7,500-square-foot HQ Truro facility at The Common Works complex at 1 Commercial St. in the Nova Scotia town. It’s set to open in February.
- Huntington Properties is the landlord partner in the 7,200-square-foot HQ Ottawa location at 396 Cooper St. that’s set to open in March.
- Multivesco is the landlord partner in the 5,000-square-foot HQ Gatineau location at 200 Montcalm St., Tower 1 in the city across the Ottawa River from the nation’s capital. It’s set to open in March.
- ELM Developments is the landlord partner in the 19,800-square-foot HQ South Edmonton location set to open in the ELM Business Park at 9426 51st Ave. in May.
“HQ is a brand that has a lower cost to build, but it's very beautiful, very productive and provides all the design aesthetics and amenities that a company would want for its clients and for its team members,” said Berger.
“I think HQ has a tremendous brand equity and a significant amount of growth opportunity in Canada.”
Other IWG locations opening in Canada this year
Here are the other IWG locations confirmed to open in Canada in the next six months:
- Markland Property Management is the landlord partner in the 17,266-square-foot Regus Cambridge at 73 Water St. in the Southwestern Ontario city. It’s set to open in February.
- IMC Management is the landlord partner in the 10,600-square-foot Regus Sherbrooke location at 455 King St. W. in the Eastern Quebec city. It’s set to open in April.
- Deerfoot Atria Partners Ltd. is the landlord partner in the 15,000-square-foot Regus Calgary location at 6815 8th St. N.E. Calgary’s 15th Regus site is set to open in June.
- Memnon Management Inc. is the landlord partner in the 22,077-square-foot Spaces Leslieville location in The Wrigley Building at 235 Carlaw Ave. Toronto’s 14th Spaces site is set to open in May.
- Lighthouse Hospitality Management is the landlord partner in the 17,000-square-foot Spaces Edmonton in the 28-storey Peak Tower (formerly Enbridge Tower) at 10054 102 St. It’s set to open in July.
Berger said IWG is also in negotiations with building owners to open its first upscale Signature locations in Toronto, Montreal, Vancouver and Ottawa.