It’s hard for anything to stay hidden for long in Reykjavik. With a population of 120,000, the highstreet feels like a backstreet (albeit a quaintly beautiful one), and everyone knows everyone.

In the even less-trodden industrial area to the northwest of the city, where cranes and fish trawlers rhythmically churn up the harbour, and a tinny, sulfurous smell fills the air, a recently converted herring factory is quietly setting the citywide standard in art, architecture and design.

Marshall House was converted by local architects Ási Sturluson and Steinþór Kárason of Kurt og Pí earlier this year in an undertaking they describe as ‘the project of a lifetime’. Almost ten years in planning, and one in the making, the conversion was riddled with difficulties.

The city council keeps a close eye on the heritage of the area, and has already banned new hotels from popping up. Required by regulators to retain the white, window-lined shell, Kurt og Pí had to work from the inside out to create a viable space to show art – still tricky with so many windows and such little blank wallspace. They accomodated this by creating temporary partition walls within the vast, light-filled warehouses. To wit, they had to dig out the original 1948 flooring to fully eradicate the smell of herring.

Olafur Eliasson has opened a satellite studio in Marshall House. Courtesy of the artist and i8 Gallery, Reykjavik

Tucked away at the top of an impressive concrete staircase – with railings repurposed from the factory’s original steel framework – is the satellite studio of Danish-Icelandic artist Olafur Eliasson. Berlin has long been the artist’s primary site for artistic production, where Studio Olafur Eliasson is large enough to house a dedicated project team and a range of passing interdisciplinary collaborators. In comparison, the Reykjavik studio is a small, informal cluster of rooms; a space for thinking and experimentation in direct response to the Icelandic context.

‘Opening a satellite studio in Reykjavik is, for me, a very natural step,’ Eliasson says. ‘I’ve always felt emotionally connected to Iceland; its landscape and unique light conditions have been a strong source of inspiration, and an environment in which to test artistic ideas – almost like a studio situation itself.’

From the studio’s eastern-facing windows, Eliasson can look across the harbour, to one of his larger creations – the façade of Harpa Concert and Conference Centre, which opened in 2011. Intimately connecting the two buildings, and celebrating the unique light-quality that seems to hang between them in the bay, Eliasson has designed custom light fittings for his new studio, from the same glass as the blue-green windows of the concert hall.

The move to Reykjavik was ‘a very natural step’, says Eliasson. Courtesy of the artist and i8 Gallery, Reykjavik

Thanks to management from Börkur Arnarson – the owner of i8 Gallery, Eliasson’s Icelandic representation – the new studio is also open to the public. In a very community-focused, Icelandic way, locals use it as a place to sit, talk and create.

Marshall House is also home to two locally important, grassroots art institutions, Kling & Bang and The Living Arts Museum – both of which struggled to maintain their flagship locations elsewhere in the city in the aftermath of Iceland’s economic crisis. Marshall House scooped them up, and gave them free reign to develop their spaces as they wished. The latter is currently showing an exhibition of its ‘disordered library’ of 800 first-edition art books, collected over the last 40 years.

Downstairs, an open-plan café, level with the ocean at high tide, serves fresh seafood and great apéro to visitors. It also doubles as an off-the-beaten-track watering hole for local artists. With his studio space just around the corner, Ragnar Kjartansson is said to be a regular.

The artist-run, artist-first factory is a symbol of, and commitment to, Iceland’s home-grown creativity. Commercial galleries are still fairly uncommon in the city, and community-led projects take precedent. Still, few are as far-reaching and generous as Marshall House’s beautifully designed 1,800 sq ft space, which would be a treat for artists and visitors alike in the busiest of capital cities.