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Low finance replaces high tech in a 'valley'

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Jan 08,2003
Teheran-ro, a long boulevard starting in Yeoksam-dong and ending in Samseong-dong south of the Han River in Seoul, is one of the most affluent districts in southern Seoul, lined with skyscrapers of many dot-com companies, the industrial leaders of the late 1990's. But it's not Korea's Silicon Valley any more; dot-com firms are rushing to leave the high-cost area as their businesses continue to struggle. Mirae Corporation, a precision equipment manufacturer, sold its building to an English language institute and has moved to Cheonan city in south Chungcheong province. Serome Technology Inc., an Internet phone service provider, also relocated three months ago to Technomart in eastern Seoul, where the rent is 50 percent lower than in Asem Tower, where it formerly held offices. "The company has been going through a reorganization, reducing from 200 staff to 90," an official at Serome said. "We calculated that the company could save 9 billion won ($7.5 million) a year by moving out of the techno district," said an official at Ahnlab Inc., a software firm. "But workers were not very happy about the planned move because Teheran-ro had better infrastructure." The company moved to Soseo-dong, on Seoul's outskirts early in 2001. Interpark Corp., a major online shopping mall company, also moved to northern part of Seoul to save rents from its main office located in Samseong-dong in last October. So what's big now on Teheran-ro? Private loan companies, people in the area say. "These loan companies have their own registered names, but the official names are different from what they really do," an official at Asem Tower said. He added that private lenders have leased most of the building. Sources in the private loan industry estimate that about 60 percent of 100-trillion-won market is traded in the techno district. "Loan companies, focusing on individual loans, are moving into Teheran-ro because a lot of people need to borrow money as quickly as possible and come to finance companies in this neighborhood," said Kim Myung-il, the chairman of the Korea Finance Union. Mr. Kim also said that 33 percent of his member companies are located in the Teheran-ro area, with the rest in Myeong-dong in central Seoul, which is a long-standing business loan center. "Most landlords in Teheran-ro prefer private loan companies because they pay six to seven months' rent in advance," one landlord there said. "Information technology companies had trouble paying their rent at all." by Kim Hae-noon


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