WeWork closes major office in Seoul for restructuring

Coworking space operator WeWork Inc. is slated to shut down a major office in Seoul, once one of the largest WeWork offices in Asia, in September as a part of its restructuring in the South Korean market, where the company entered in 2016.

WeWork will close WeWork Euljiro in the Central Business District (CBD) of Seoul on September 13, according to investment banking industry sources on Monday. The coworking space provider will continue to operate the other 16 offices in the capital and two in Busan.

The building Daishin 343, the headquarters of Daishin Securities Co., is set to be sold to NH-Amundi Asset Management Co. for around 660 billion won ($480.2 million). The joint venture between NongHyup Financial Group and French asset manager Amundi is planning to terminate the contract with WeWork and increase the rent for new tenants, according to market insiders.

WeWork Euljiro was launched in 2017 as one of the biggest WeWork offices in Asia at the time, equipped with 2,400 desks.

But leasing rates have been low as there are more conglomerates and mid-sized companies than startups and small firms in the surrounding business district. WeWork Korea terminated the contract of renting the 12th-16th stories in 2020 to save fixed costs and has since been using only the 7th to 11th stories.

WeWork Korea sent letters to the landlords of the offices it rents, requesting a reduction in rental prices, via its restructuring advisor Alvarez & Masal Holdings LLC in February.

However most landlords rejected such requests, and it was difficult to transfer the rental agreements to other coworking space providers due to different business strategies, according to market insiders.

WeWork filed for Chapter 11 bankruptcy last November and won US court approval for its bankruptcy plan last week. The plan will eliminate $4 billion in debt and cancel its existing equity.