“Although we have three million square feet of space currently offered across the country, we can’t keep up with the demand that’s coming in,” IWG Canada and Latin America chief executive officer Wayne Berger told RENX.
He said the amount of space to be added this year will be up 300 per cent from 2018.
IWG, which has tripled in size in Canada over the past four years, could easily do that again during the next five years and might still struggle to meet the demand in the workplace, Berger added.
“We’re still growing the Regus brand, but a significant amount of our next stage of investment is going into Spaces. Spaces represents about 85 per cent of the total square footage that we’re investing in.”
Spaces, which was launched in Amsterdam, has two locations in Toronto and one each in Montreal and Vancouver. It will open a minimum of nine new locations this year in Toronto, Vancouver, Montreal, Victoria and Kelowna, B.C. The company will bring its largest North American locations to Vancouver and Toronto by 2022.
New Spaces locations
Here are the new Spaces locations included in the company’s most recent announcement, along with tentative opening dates (The The Well and 400 West Georgia locations won’t open until 2022 and 2021 respectively and aren’t included in the 2019 totals):
* Spaces Gladstone at The Carnaby mixed-use property at 11 Peel Ave. in Toronto will offer 26,000 square feet in the rapidly gentrifying West Queen West neighbourhood when it opens in November;
* Spaces St. Clair at 2 St. Clair Ave. W. in Toronto will offer 25,000 square feet in a midtown area going through plenty of modernization. Spaces will open on the podium floor and have a 2,000-square-foot rooftop patio when it opens in December;
* Spaces North York at 5200 Yonge St. in Toronto will offer 40,000 square feet of space with a floor-to-ceiling glass podium, more than three floors and a rooftop patio in the new mixed-use Beacon Condos development when it opens in November;
* Spaces Liberty Village at 80 Atlantic Ave. in Toronto will offer 20,000 square feet in a new building with exposed mass timber columns and beams and cross-laminated timber ceilings when it opens in October;
* Spaces The Well at 460 Front St. W. in Toronto will offer 127,000 square feet in the highly anticipated The Well development. It will be the largest North American Spaces location when it opens in 2022;
* Spaces Mount Pleasant at 565 Great Northern Way in Vancouver will offer 40,000 square feet near Emily Carr University’s new campus, in an area that’s home to Vancouver’s burgeoning technology and startup scene, when it opens in September;
* Spaces Uptown Vic at 3450 Uptown Blvd. in Victoria will offer 25,000 square feet in a “work, live, play” complex in the open-air, village-style urban neighbourhood of Uptown Victoria when it opens in September;
* Spaces Kelowna at 460 Doyle Ave. in Kelowna will offer 22,000 square feet in The Innovation Centre, a new technology-centric building, when it opens in September.
“We’re looking to accelerate growth in major markets and recognizing that there’s a finite need in some very unique markets like Victoria and Kelowna,” said Berger.
“We’re seeing an increase in demand for flexible co-working workspace in those markets. We’re also seeing demand for different types of workspaces.”
New Regus locations
Regus has 108 office, co-working and meeting locations in Canada, according to Berger. In October, it opened a 13,000-square-foot location in Halifax, a 9,232-square-foot location in Calgary and an 8,000-square-foot location in Kitchener, Ont.
Here are the new Regus locations included in the company’s most recent announcement, with tentative opening dates:
* Victoria – Yates at 535 Yates St. in Victoria will offer 13,000 square feet when it opens in August;
* A site at 49 High St. in Barrie, Ont. will offer 8,000 square feet when it opens in December;
* Regus will expand its space at 130 King St. W. in Toronto’s financial core by taking over the 19th floor, in addition to its current occupation of the 18th floor, in the Exchange Tower. The footprint will increase to 50,000 square feet in March.
Heavy competition for securing locations
“We’re seeing greater competition for space from other co-working workspace providers and traditional tenancies,” said Berger. “We’re seeing more and more companies looking to get into the downtown core of cities because of demands from workers.”
IWG has established strong partnerships with landlords including Allied Properties REIT (AP-UN-T) and Oxford Properties. Berger said studies have shown that adding co-working space can improve the quality of buildings and increase their value, particularly with class-A and class-B properties.
Deloitte has pre-leased all 78,000 square feet of Spaces Granville and will move 700 team members there as part of a workplace transformation strategy to engage, retain and attract employees.
“They decided to partner with Spaces since our values are aligned and our design principles are aligned, and they loved the space,” said Berger.
He said significant pre-lease deals in other locations will be announced over the next few months.
“We’re seeing very high activity in pre-leasing from large global enterprise companies, as they’re looking to expand their footprint in markets like Toronto and Vancouver, which are very tight for vacancies.”
Landlords move into co-working
Because co-working spaces are in high demand, Berger said some building owners are becoming directly involved in the sector as opposed to leasing space to companies like IWG.
He said, however, that large landlords rarely operate hotels on properties they own because they’re complex businesses that require specialists to run them effectively. Co-working spaces are similar, according to Berger.
“I think what will happen is that landlords and developers will see a business that’s highly operationalized, incredibly fluid and a tremendous amount of work,” said Berger. “I think they’ll recognize the resources that are required, and the fact that it’s a new business venture for a landlord versus IWG, which has 30 years of experience in this.
“I think you’re going to see landlords, developers and institutional groups dabble and then partner with co-working organizations like IWG to help manage that space later on.”
Other IWG brands coming to Canada
“A brand diversification strategy is paramount to our success,” said Berger. “A multi-brand strategy of different types of environments, workspaces, design elements and price points also drives a high level of value.”
Clients ranging from individual freelancers and small startup firms to multi-national corporations are seeking flexibility and asking for space around the world, according to Berger. IWG offers a global network of some 4,000 locations which its 2.5 million members can access in addition to the workspaces they use most frequently.