IWG Targets Nordic Expansion: Embracing Hybrid Working

Recent years have witnessed a remarkable shift in the workplace environment, largely influenced by the popularity of flexible office spaces. This change has redefined traditional work paradigms, impacting not just individual regions but the global workforce at large. International Workplace Group (IWG), a global leader in the flexible workspace arena with over 4000 locations across 1200 cities worldwide, exemplifies this trend with its substantial expansion in the Nordic region.

In a recent webinar hosted by 1851 Franchise, key figures from IWG discussed their ambitious expansion plans in the Nordic region. Patrik Ölvebäck, Country Manager for Regus, and Pelle Persson, Director of Partnership Sales, provided in-depth insights into IWG's strategy, growth and the evolving landscape of flexible workspaces.

The Evolution of Workspaces in the Nordics

With a decade of experience at IWG, Ölvebäck has been instrumental in the growth of around 80 IWG locations across the Nordic countries. He shared his valuable insights on the evolution of workspace, particularly in the context of hybrid working models. 

"When I joined the company about 10 years ago, it was already a growing business,” Ölvebäck said. “The coworking and hybrid working trend was taking off and the shift was starting. The pandemic accelerated this trend significantly, with almost 90% of employers now seeking hybrid working solutions for their workforce.”

Rather than simply working from home or the office, more and more employees are expressing a desire for a third option — a hub-and-spoke model where they go to a local flexible workspace every day. With this evolution in work culture, the global flexible workspace industry is projected to nearly double in size, from $7.97 billion to $13.03 billion, by 2025. 

This increase signifies a demand-supply imbalance, presenting an excellent opportunity for IWG and potential partners, said Persson, who brings an extensive background in franchising and retail.

IWG has been gaining significant traction in the Nordic region, especially in Sweden, with a number of new locations and a growing interest from property owners to understand and engage with a hybrid model.

"Before the pandemic, we saw about 10000 to 12000 inquiries coming into our sales platform per year in the Nordics,” said Ölvebäck. “It's now more like 20000 per year and still increasing." 

IWG’s Value Proposition for Building Owners

By taking a portion of their commercial real estate portfolio and transforming it into an IWG flexible workspace, building owners and investors can get ahead of a seismic shift in the industry, drive operating income from day one and turn empty space into profitable revenue.

"We reach out to property owners sitting on vacant space, offering them a turnkey solution to open a flex office in their building,” said Persson. “We operate it and, in return, we take a service charge or fee, generating better returns than regular market rent. This is quite exciting because it's akin to franchising but without the hassle of operating the business, which is often a big challenge in franchising.” 

Instead of signing a conventional lease, IWG offers building owners and both institutional and individual investors a second option — fully absentee space management. With this program, IWG activates and manages all of the operations on behalf of the business investor, giving them the ability to generate revenue and operating income with no operational work.

IWG sits down with every prospective investor and lays out a financial model to showcase when they will recoup their investment, drive income and bring in a premium over market rent. From there, IWG will help building owners understand an indicative floor plan. IWG also has a team for design, construction, sales, marketing and everything needed to build, operate and launch a successful new flexible workspace.

"What makes us stand out in the market is how well we support our partners,” said Persson. “We're not just offering a space — we're providing a comprehensive package of operational support, market insights and a proven business model. This comprehensive support makes IWG an incredibly attractive option for those looking to enter the flexible workspace sector."

Future Outlook and Expansion Plans

Looking ahead, IWG is set on a robust growth trajectory, with a plan to expand from 80 to around 100 centers in the Nordics by next year. The long-term goal is even more ambitious, with a vision for 500 centers.

“It's about not just opening centers, but ensuring each one adds value to our network and to the communities they serve,” said Ölvebäck. “We're committed to this path and excited about the future."

With IWG's proven business model and the increasing demand for flexible workspaces, the opportunity for investors in the Nordic region and beyond is significant.

For more information, visit iwgplc.com/develop-a-location.