Turning strategy
into tangible results
Experience is the blueprint
we build upon
PERFORMANCE REPORT
MANAGING DIRECTOR’S
MESSAGE
“Carefully planned strategic investments over recent years have allowed us to navigate uncertainty, and drive positive momentum in our core business operations. A growing commitment to ESG, alongside our financial goals, is now guiding our path forward.”
Dear Stakeholders,
In an unpredictable, rapidly changing landscape marked by ongoing conflicts in Eastern Europe and the Middle East, high oil prices and freight costs, and elevated interest rates, Lavastone Properties delivered a satisfactory performance in FY 24. The groundwork laid in recent years, through carefully planned strategic investments, has positioned Lavastone Properties to not only withstand these external pressures, but reap the returns of our well-timed investments. A growing commitment to ESG (Environment, Social and Governance), alongside our financial goals, is now guiding our path forward.
Strategic milestones and growth avenues
This past year, our focus on three key initiatives— completing the Mourouk development in Rodrigues and securing two high-yield acquisitions—has contributed to our improved financial performance. These moves reduce our dependence on the office segment and balance our exposure across a more diverse asset base.
We have also undertaken a strategic review of our portfolio to maximise the potential of our existing assets and identify select properties for divestment. This approach will allow us to reinvest in projects with high potential for long-term value creation, and finance the refurbishment of key assets, whilst remaining within our conservative borrowing parameters. Consistent with this strategy, we expect to close on the acquisition of an industrial site for further development by mid-2025.
Looking ahead, the Case Noyale project represents a strategic expansion aligned closely with Lavastone Properties’ long-term growth and sustainability objectives. With permits secured and the Environmental Impact Assessment complete, we are awaiting final clearances and expect to break ground early next year. Case Noyale will also host a photovoltaic (PV) farm, reinforcing our ESG goals in alignment with Mauritius’s renewable energy aspirations.
Operational highlights
Our portfolio performed commendably in FY 24, driven primarily by additional revenue contributions from C Rodrigues Mourouk and the newly acquired yielding industrial spaces. This resulted in a 29.6% growth in turnover (excluding sale of land) and a 37.4% increase in operating profit (excluding profit of sale of land), which reflects organic growth and positive momentum in our core business operations.
That said, this year’s financial results were impacted by increased operating expenses, notably from higher labour costs and the newly introduced Corporate Climate Responsibility Levy of Rs 1.2 million, which affected Lavastone Properties due to our September year-end. Consequently, we also incurred a 2% increase in deferred tax liability (a non-cash item), resulting in an Rs 11 million reduction in reported profits. Given this tax’s broader impact on our business, we remain hopeful that future iterations will evolve towards rewarding businesses like ours that demonstrate clear ESG commitments and a verifiable carbon reduction strategy.
Alongside this, delays in the Government’s occupancy of the 7th floor office space at Victoria Station Limited (an associate company), combined with sustained high interest rates, negatively impacted its anticipated returns. However, we are optimistic about a positive turnaround at Victoria Station, encouraged by the strong interest shown in the 7th floor and consistently high occupancy of the retail spaces.
Across our portfolio, overall occupancy stood at 96% and rental collection rates exceeded 98%, indicating that our properties continue to hold strong appeal, consistently retaining and attracting quality tenants, and contributing to the stability of our portfolio. Staying close to our tenants has been key to these outcomes, involving open communication and regular discussions to ensure that we create spaces that not only meet, but often anticipate, their changing needs and business requirements. in our Financial, Intellectual and Manufactured Capital sections.
Digital transformation, driven by targeted automation projects, has also been a key enabler of operational efficiency, as outlined more extensively in the intellectual capital section on page 40.
Toward a greener, more inclusive future
ESG considerations have become central priorities for Lavastone Properties, materialising through focused decarbonisation initiatives and the publication of an ESG report, which, while not yet comprehensive, reflects our commitment to more sustainable operations and transparency in our reporting practices. In 2023, a comprehensive assessment of our carbon footprint using the Bilan Carbone® methodology revealed that tenant activities contribute the largest share (75%) of our emissions, prompting us to initiate diverse engagement strategies—from in-depth discussions to workshops and sharing best practices—to drive collective progress toward our carbon reduction goals. in our Natural Capital section on page 42 and ESG report on page 48.
Pursuing the LEED certification, a recognised standard for energy-efficient and environmentally friendly buildings, is another essential step in elevating the environmental performance and resilience of our properties. Achieving the LEED Gold (O+M) certification for EDITH in 2022—a first for a mixed-use building in Africa—set a high standard for Lavastone Properties’ other assets, sparking strong interest from our tenants to participate meaningfully in these efforts. During the year, LEED gap analyses were conducted at Les Cascades Building and Absa House, while the implementation of the certification process is already underway at Cim House. Once operational, the solar farm at Case Noyale is expected to considerably offset energy consumption, supporting our ambition to more than halve our carbon emissions by 2030.
Lavastone Properties values long-term, quality relationships with all stakeholders, which includes employees, tenants, investors, and the broader community as outlined in our Stakeholder Engagement section on page 68. Recognising that our people are the driving force behind our success, we are committed to nurturing their growth through tailored training and development programs that align with departmental needs and individual career aspirations. Read more in our Human Capital section on page 46 and ESG report on page 48.
Sound governance practices anchor our business foundation, as discussed by our Chairman on page 26, and further detailed in our Corporate Governance Report on page 72.
Outlook for FY 25
Our priorities for 2025 are clear. We aim to finalise a key acquisition in the industrial space, set to further broaden our portfolio as part of our ongoing diversification strategy. We are also planning significant reinvestments in key assets, Absa House and Les Cascades Building, with major renovation projects designed to elevate their quality, attractiveness, and alignment with LEED standards.
Proactive engagement with our tenants will remain paramount in the current economic climate. We remain vigilant to economic shifts, and more attuned than ever to our tenants’ evolving needs, ensuring they are wellsupported to meet their rental commitments.
The recent general elections in Mauritius present a promising outlook for economic growth, with anticipated business-friendly policies that encourage sustainable development—a vision that aligns well with Lavastone Properties’ ESG commitments.
Acknowledgments
To our Board of Directors, steered by Colin Taylor, thank you for your pivotal guidance and oversight, which have enabled us to seize new opportunities with confidence.
I extend my deepest appreciation to the entire Lavastone Properties team for their hard work and dedication throughout the year. We are fortunate to have an agile and dynamic team, willing to embrace new challenges and drive our objectives forward. A special congratulations goes to Alex Lan Pak Kee on his promotion to Head of Finance—a well-deserved recognition of his efforts, and a reflection of our commitment to nurturing talent from within and supporting leadership development.
I would also like to thank Nicolas Pougnet for his invaluable role in bringing the C Rodrigues Mourouk project to final completion under very challenging conditions. Nicolas brings extensive experience in the construction industry and his expertise, wisdom and guidance will be valuable for our ongoing and future development projects.
In closing, I extend my gratitude to all our stakeholders— shareholders, partners, tenants, and the community—for your continued trust and partnership. We look forward to building on the achievements of this year, with a shared commitment to a low-carbon future.
Managing Director
PERFORMANCE
REVIEW
FINANCIAL CAPITAL
Financial capital provides a strong foundation to pursue acquisitive opportunities, meet our growth objectives, and maximise shareholder returns. Through disciplined financial management and expansion into different asset classes, we navigated the volatile business landscape and maintained healthy financial ratios.
Stakeholders who benefit:
KEY INPUTS
PERFORMANCE AGAINST STRATEGIC OBJECTIVES
Maximise shareholder value
- Achieved 29.6% revenue growth (excluding sale of land)
- Completed C Rodrigues Mourouk in November 2023
- Concluded the acquisition of two high-yielding industrial properties in Coromandel and Riche Terre, contributing 6.2% to rental income
- Diversified Group portfolio, reducing concentration in office segment and improving risk profile
- Focused on treasury management
- Reaffirmed Grade A rating from CARE Ratings Africa for MCB bond and Absa loan
Operational excellence
- Reduced administrative and operating costs from 39.9% to 36.8 % of revenue
- Improved rental collections, ensuring cash flow stability
OUTPUTS AND VALUE CREATED
PRIORITIES FOR FY 25
- Maintain Grade A rating from CARE Ratings Africa
- Conclude acquisition and development of an industrial site by end of Q2 FY 25
- Improve rental collection above 98%
- Achieve revenue growth of at least 5%
- Monitor and control administrative and operating costs to remain below 40% of revenue
- Improve EBITDA by 5%
MANUFACTURED CAPITAL
Manufactured capital supports growth and operational excellence across our portfolio. By investing in high-quality renovations, tenant-focused upgrades, and sustainable building certifications such as LEED, we continually enhance the value, appeal and resilience of our assets.
Stakeholders who benefit:
KEY INPUTS
PERFORMANCE AGAINST STRATEGIC OBJECTIVES
Maximise shareholder value
- Enhanced portfolio value through selective high-yield acquisitions and strategic renovations
- Advanced green building standards, supporting investor appeal
Operational excellence and Customer service & retention
- Acquired 18 new tenants
- Achieved 96% occupancy
- Obtained EIA license for morcellement at La Gaulette, awaiting letter of intent from the morcellement Boards
- Revamped ground-floor office spaces at Les Cascades Building for lease to new tenants
- Opened C Rodrigues Mourouk
- Refurbished 5th floor at Absa House and incorporated LEED principles to enhance work environment and advance sustainability goals
- Tenant fit-out coordination for 4 new tenants at EDITH
OUTPUTS AND VALUE CREATED
PRIORITIES FOR FY 25
- Obtain permits for the launch of the next morcellements at La Gaulette
- Sign MOU with key tenants for the launch of the commercial development at La Gaulette
- Launch warehouse project at Montebello
- Engage with our tenants for LEED certifications of at least 2 buildings by end of FY 25
- Achieve 98% occupancy rate at EDITH
- Improve occupancy at Absa House to above 95%
- Reduce vacancy rate across the portfolio
INTELLECTUAL CAPITAL
Our intellectual capital focuses on enhancing our knowledge assets, innovation and process improvements to improve efficiency and service levels. By investing in digital systems and sustainability certifications, we aim to not only advance our technical expertise, but also the employee and tenant experience, supporting differentiation in a competitive landscape.
Stakeholders who benefit:
KEY INPUTS
Substantial
investments in new systems and technologies to streamline operations
Increased focus
on digitalisation
PERFORMANCE AGAINST STRATEGIC OBJECTIVES
Customer service & retention
- Improved retained clients and renewed contracts following implementation of new systems
Operational excellence
- Implemented a digital procure-to-pay system
- Rolled out ‘Upkeep’ module within facility management to improve tracking and reduce repairs/ maintenance time
- Deployed an electronic KYC platform
- Carried out monthly data collection at EDITH
Sustainability
- Conducted LEED gap analyses for key assets: Absa House (HVAC Systems Investigation) and Les Cascades (Fresh Air System)
- Supported Cim Finance in implementing LEED standards at Cim House
OUTPUTS AND VALUE CREATED
PRIORITIES FOR FY 25
- Maintain LEED certification (O+M) at EDITH and initiate certification at other key property assets
- Implement new parking management system
NATURAL CAPITAL
Our commitment to preserving natural resources is centred in reducing our Greenhouse Gas (GHG) emissions, aiming to minimise our carbon footprint across all operations. We continuously assess our environmental performance, implementing targeted measures to reduce our impact and align with national and global sustainability goals. This year, we have also published an ESG report, underscoring our transparency and dedication to environmental stewardship.
Stakeholders who benefit:
KEY INPUTS
available for development opportunities
PERFORMANCE AGAINST STRATEGIC OBJECTIVES
Sustainability
- Conducted a comprehensive carbon footprint analysis, with an enhanced focus on scope 3 emissions
- Ongoing development of our assets in line with LEED principles
- Continued to monitor key assets to identify areas for improvement
- Improved waste collection and recycling performance (detailed in our ESG report)
- Overall decrease in water and energy consumption across portfolio (except in buildings with increased occupancy)
- Implemented a reflective waterproofing membrane to reduce heat load at Cim House
- Produced renewable energy through PV panels installed on the roof of ASAS parking
PRIORITIES FOR FY 25
- Secure the necessary permits and approvals for the implementation of a PV Farm at Case Noyale
- Initiate the LEED certification at other key property assets
- Support an endemic reforestation programme
SOCIAL CAPITAL
Fostering strong, long-term relationships with our stakeholders is key to our enduring success. We prioritise customer satisfaction, employee engagement and community empowerment, ensuring we actively listen to their needs, and drive initiatives that meet their expectations. This commitment reinforces our role as a responsible, trusted partner and a positive force in the areas where we operate.
Stakeholders who benefit:
KEY INPUTS
PERFORMANCE AGAINST STRATEGIC OBJECTIVES
Customer service and retention
- Communicated a monthly Marketing & Communication report to EDITH tenants
- Maintained close engagement with tenants
Sustainability
- Contributed funds to Taylor Smith Foundation to support projects in education & youth development, women & family empowerment, sports, and environmental conservation
OUTPUTS AND VALUE CREATED
PRIORITIES FOR FY 25
- Continue contributing to sustainable development, with a focus on economic, social and environmental pillars
- Continue focusing on education is a top priority in our CSR activities
- Support NGOs and community groups in social impact endeavours
- Conduct an annual customer satisfaction survey
- Continue the implementation of the communication strategy at EDITH
- Maintain client retention rate to above 95%
HUMAN CAPITAL
Our team members are the lifeblood of our business. We prioritise their development through training, career advancement opportunities and clear performance metrics, ensuring that they are both engaged and equipped to contribute meaningfully to our goals and to their individual aspirations. We actively listen to their needs to ensure we nurture a work environment in which they feel valued and fulfilled.
Stakeholders who benefit:
KEY INPUTS
including managers and leaders
PERFORMANCE AGAINST STRATEGIC OBJECTIVES
Employee engagement
- Continued to focus on enhancing diversity and inclusion in our teams, at all levels
- Conducted townhall meetings and off-site team-building activities, with a focus on upskilling in Communication, Coordination and Time Management
- Introduced work-from-home policies for applicable roles
- Progressed on the development of a Competency Framework
- Continued to improve the business continuity plan to ensure smooth succession in key roles
- Management Leadership Program (L.I.F.T.) conducted for managers
OUTPUTS AND VALUE CREATED
PRIORITIES FOR FY 25
- Launch the Performance Management System (PMS) online, based on the findings of the Competency Framework
- Develop career development plans for employees
- Continue the Management Leadership Program (L.I.F.T) conducted for managers
- Staff turnover rate of below 5%
