Tehran Valley moves beyond venture firms

A view of Tehran Valley in southern Seoul [JoongAng Ilbo]

Tehran Valley in southern Seoul, stretching from Samsung Station to Gangnam Station, is rising once more as a hub in Korea, but no longer as a venture valley. The area was once considered the hot spot for technology start-ups at the beginning of the millennium, but phased out a couple of years ago when the venture bubble burst. Now, it is home to top firms, both foreign and domestic.
The Gangnam Finance Center in Yeoksam, southern Seoul, is a 45-story building that towers over the corner of the large intersection one finds oneself at when emerging from Yeoksam Station on Seoul’s subway line No. 2. About a dozen tech firms are housed in this building, including Google Korea, which moved here in May. Nestled on the 22nd floor, workers in the modernly furbished office are not restricted to a specific dress code and are treated to free international cuisine in cafe-like settings.
Tehran Valley refers to Tehran Street and the surrounding area. The four-kilometer (2.5-mile) road was given its current name in 1977 to commemorate Seoul’s sister-city relationship with Iran’s Tehran.
It began regaining its fame when major companies started setting up corporate headquarters, beginning with Dongbu Steel in 2002, Posco in 2003, the GS Group in 2004 and Hyundai Mobis in 2005. When the Samsung Group finishes its “Samsung Town” just off Gangnam Station early next year, it will anchor one end of Tehran Valley.
The region now has brand value for the corporations it houses.
“If you have your headquarters in Tehran Valley, you are recognized abroad as a firm with potential,” said Park Jae-mun, an official at the Information Ministry.
Demand for offices in the area can also be seen in lack of available space. These days it is difficult to find an empty office bigger than 1,653 square meters (17,792 square feet) and monthly rents are 65,000 won ($70.60) to 105,000 won per 3.3 square meters. According to local realtors, the open office space rate in the Gangnam area in June was 1.4 percent ― far less than the 1.9 percent for downtown Seoul or the 2.1 percent in the financial district of Yeouido.
For firms like the game developer NCSoft, which has been in Tehran Valley since 1997, the region provides different benefits than before.
“When we were a new firm, we were able to raise our reputation as a venture firm by being here, but now that we are expanding abroad and looking for good human resources and investors, it is advantageous in a different sense,” said Kim Ju-young, a senior official at NCSoft.
Microsoft Korea, which has been located in the Posco building for 12 years, also finds the location attractive. “The business infrastructure is well-equipped and business partners are nearby,” said Kim Eun-hyun, senior official at Microsoft Korea.
Tehran Valley has about 100 branches and headquarters of financial companies and 10 of Korea’s largest legal firms.
“Tehran Valley’s role was that of an incubator, but now it is a nest for companies that have endured global competition,” said Park Yong-gyu, a senior researcher at Samsung Economic Research Institute.

By Lee Weon-ho JoongAng Ilbo/ Wohn Dong-hee Staff Writer [wohn@joongang.co.kr]