Iceland to build resilience with largescale projects
The country has a series of developments underway to diversify the economy and which will capitalise on sustainability principles and a diverse workforce.
Signature projects geared towards leveraging Iceland’s current growth trends and diversifying its economy are moving forward.
Iceland’s main airport, Keflavík International Airport, is evolving to meet passenger demand and its expansion is part of a wider masterplan to capitalise on the region’s economic potential.
Keflavik Airport Development Company (Kadeco) is responsible for leveraging the potential of the increasingly busy airport for the benefit of the surrounding area. The Keflavík Airport Area masterplan, called K64 and launched by Kadeco in March 2023, provides a long-term strategic vision by bringing together a spatial framework and an economic programme that will unlock the region’s huge potential and help diversify the economy.
The area, which includes the airport and the communities in its immediate vicinity, Reykjanesbær and Suðurnesjabær, is only 50km from Iceland’s capital, Reykjavík. It is a part of the Suðurnes region, a unique area of Iceland with UNESCO Global Geoparks status.
Multinational development team selected
A multidisciplinary team, led by international planning agency KCAP and comprising many different nationalities, was selected in a competitive process to develop the masterplan.
The vision is that by 2050, the area will host a mix of industrial activities, boosting Iceland’s resilience against economic shocks such as the recent pandemic and climate change, while leveraging features such as renewable energy, a young and diverse workforce and strong sustainability principles.
The masterplan proposes to focus on the development of a few strategic areas with a high impact in terms of identity and value creation. With Keflavík airport in the centre and in synergy with the wider region, these focus areas include Helguvík-Bergvík, which will be transformed into an eco-industrial park, as well as key sites at Aðalgata and Ásbrú. Furthermore, rural areas are connected through active mobility and landscape networks.
“The framework plan for the Helguvik and Bergvik site is a collaborative initiative between us and the two municipalities aiming to foster economic growth through the development of an eco-industrial park near the airport and an international shipping harbour.”
Pálmi Freyr Randversson, Kadeco
“The framework plan for the Helguvik and Bergvik site is a collaborative initiative between us and the two municipalities aiming to foster economic growth through the development of an eco-industrial park near the airport and an international shipping harbour,” says Pálmi Freyr Randversson, managing director of Kadeco.
Meanwhile, residential development at Ásbrú, a former naval base that is being repurposed to include residential and manufacturing clusters, is taking off and Kadeco signed a deal with a developer in summer 2024 for 150 housing units. “We are working on three local plans for residential development at Ásbrú, which will focus on densifying and creating a sustainable neighbourhood for residents,” says Randversson.
Commercial development proceeding
Commercial development at the airport gateway area – including a hotel, pharmacy, restaurants and residential – is also proceeding. “This is mostly happening through a local developer who has incorporated the K64 vision into their plans and is attracting international and Icelandic investors,” Randversson says.
Development contracts are also in the works with international algae producers and data centres, among other industries. Partners are “both international and Icelandic, big and small”, Randversson adds.
“We are also constantly using the ambitious landscaping, mobility and economic strategies from K64 with local authorities, sticking with the plan and the holistic, comprehensive vision for the area.”
The airport zone is not the only area in Iceland undergoing development that is largescale relative to the country’s size. Faster-than-expected population growth has created a pressing need for more housing in and around Reykjavík, and there are plans to add 2,000 apartments a year in the city over the next decade to meet demand.
A major component of the strategy to ease the pressure is Keldur, a large mixed-use development covering 116 ha that includes more than 700,000 sq m of commercial, retail and residential floorspace.
Keldur is part of a corridor of dense, mixed-use urban core that runs the length of Reykjavík, from the old city centre to the eastern edge. The plan is to develop a modern urban quarter with the addition of accommodation for up to 12,000 residents and creation of 8,000 jobs, focused around eco-friendly transportation and land use as part of a carbon-neutral environment.
International contest for development
The City of Reykjavík and Transport for the Capital Area (TfCA) have signed a memorandum of understanding (MoU) to collaborate in the development of Keldur. With the MoU, a decision was made to hold an international contest for the development of the area, which was won by Swedish architect FOJAB and engineering consultant Ramboll.
Thorsteinn R Hermannsson, director of development for TfCA, says the formal planning process for Keldur is to start in mid-September 2024, when a ‘plan programme’ will be published by the city. It is assumed that a draft proposal for a masterplan will then go public in March 2025. The masterplanning process is to be finalised late 2025 or early 2026.
“The winning proposal from FOJAB architects in Malmö is the basis for further planning and design and they are working closely with us and the city of Reykjavík,” Hermannsson says.