Gyro Telkom
Gyro logo (Photo Credit: Telkom)

Telkom CEO Sipho Maseko has instructed the new management of Gyro – a new wholly owned subsidiary tasked with management of masts and towers, property development and property management services – to commercialise the company’s real estate portfolio.

The company announced on Thursday the appointment of a new CEO of Gyro. For more read: Telkom to get ‘ruthless’ with property portfolio

Gyro was established to monetise the Telkom property portfolio for long-term returns, extract value from excess building capacity, smart building solutions and allow Openserve to focus on its core business.

It is structured to provide three business services – Masts and Towers, Property Management Services, and Property Development.

Maseko revealed on Friday during the company interims presentation that the mission for Gyro is simple: “Commercialise the property portfolio and make sure that the excess building capacity we can extract value from it.”

Telkom has one of South Africa’s biggest real-estate portfolio that started being acquired under the brutal, apartheid state machinery.

Its property portfolio rose through various purchases throughout its long history, which goes back to its role as part of the old apartheid South Africa’s postal services. The company has already unlocked financial value through the migration of its head office from Tshwane Central to a new campus in Centurion.

“This property portfolio is very vast, and you need to be very thoughtful about the process and the method that you follow to unlock value there,” explains Maseko on Friday.

Gyro was established in April 2017 by Telkom.

Maseko said it has taken Telkom quite a lot of time just to make sure it knows exactly where is this property portfolio located.

“Its massive,” he explained. “It’s in a place where most of you may never hear of and we want to make sure that we know exactly what’s the potential of that real estate might be.”

Telkom services
Telkom services

Who is Gyro?

Gyro manages 6500 towers across South Africa. It also manages co-location leases on existing towers and newly built towers with other operators as well. Gyro builds towers for the market also and not just Telkom.

Telkom said Gyro Towers will focus on increasing co-location leases on existing towers, expanding the current footprint and increasing efficiencies.

The real estate entity also has 1400 properties under management and have developed a unique Integrated Property Management Solution to be able to manage this vast real estate portfolio.

“This doesn’t only help them to manage this real estate portfolio, but the is an opportunity to on-sell it and get other people to use it and generate revenue from it,” said Maseko.

Telkom believes that Gyro has 20 million square kilometres of land to be developed.

“I think this year, we will start with 39 potential properties that we will develop and see how it goes. We will partner with the right people (developers). We have created an SPV (Special Purpose Vehicle) for each of those developments,” said Maseko.

The 39 high potential properties include technical, commercial, and industrial properties across the country with a concentration in urban nodes.

What’s the progress so far for Gyro?

Telkom boss added that Gyro has just started but has managed to increase tenancy ratio on existing towers by 5% and external towers monthly revenue by 16%.

Gyro has also engaged in the market to identify development partners and concepts have been finalised for first developments.

“There are market plans we have completed for about 22 sites of these properties,” said Maseko.

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