Building strength
through stability
We shape a pattern of growth
through continuous adaptation
STRATEGIC REPORT
OUR VALUE CREATION
MODEL
OUR
STRATEGY
STRATEGIC INTENT & VISION
To be the preferred partner for commercial real estate solutions, while delivering optimum returns to our shareholders.
STRATEGIC OBJECTIVES
CHAIRMAN’S
MESSAGE
“Our prudent, long-term approach to decision-making is yielding results, allowing us to shift our focus on portfolio optimisation for sustained growth in the years to come.”
Dear Stakeholders,
As we look back on FY 24, I am pleased to report on an encouraging and resilient performance by Lavastone Properties. Despite facing high inflation, rising interest rates, and heightened competition in the real estate sector, Lavastone Properties delivered results that reflect its approach to steady, measured growth and disciplined financial stewardship. The Group ended the year with an improved turnover and operating profit, driven by strategic acquisitions and the near full-year contribution of the C Rodrigues Mourouk hotel.
Strategic progress and portfolio management
A focus on long-term capital growth appreciation continues to guide our decision-making. During the year, we successfully executed our ongoing diversification strategy by acquiring two yielding properties in the industrial segment, rebalancing both our asset class mix and geographical footprint.
We maintained a prudent approach to balance sheet management, which served us particularly well in navigating the past year’s high-interest-rate environment. The cash flow generated from our operations is allowing us to comfortably service our debt, while maintaining a healthy gearing ratio. Strong relationships with our tenants continue to underpin the stability of our portfolio, helping us achieve a commendable 96% occupancy rate for the year.
With the acquisition phase almost complete, our sights have now shifted to portfolio optimisation. The Board has undertaken a strategic review to rebalance its holdings, strategically divesting from certain properties and reallocating investments into assets that offer superior long-term value creation potential, notably in the industrial and hospitality segments. We are also exploring opportunities to expand our footprint beyond Port Louis, where we have historically concentrated our investments, to position Lavastone Properties for sustained growth in the years to come.
Delivering shareholder value
Lavastone Properties’ dedication to maximising shareholder returns remains unwavering, evident in our consistent dividend distributions and growth in Net Asset Value (NAV), a crucial metric of asset appreciation. A strong operational performance in FY 24 drove NAV growth to Rs 4.39 per share, up from Rs 4.18 last year. This resulted in Rs 54.4 million in dividend distributions to our shareholders, compared to Rs 47.6 million in FY 23. This performance, along with Lavastone Properties’ maintained A-grade rating from CARE Ratings Africa, further reaffirms our financial health and creditworthiness.
The path to decarbonisation
Lavastone Properties is committed to joining the collective global and national efforts to mitigate the impact of climate change. Enhancing the environmental sustainability of our operations and reducing our greenhouse gas emissions (GHG) are not simply a matter of compliance, but integral to our vision. A significant step in this direction was the assessment of Lavastone Properties’ carbon footprint in 2023, which established baseline data and a clear methodology for measuring and managing energy consumption in our buildings. I am particularly proud that we have decided to initiate a photovoltaic (PV) project at Case Noyale under the Central Electricity Board’s Medium- Scale Distributed Generation (MSDG) scheme, marking a milestone in pursuit of this goal.
Enhancing Board effectiveness
Effective governance is essential to building sustainable value, with the Board dedicated to upholding best practices. Recognising the importance of an adequate balance of skills, independence and experience in decisionmaking, the Board actively seeks opportunities to enhance its diversity and effectiveness. On 30 September 2024, a formal evaluation of all directors was conducted to ensure that the Board’s composition aligns with the company’s long-term objectives.
Looking ahead
As we look to 2025, Lavastone Properties has reached a phase of stability, allowing us to sharpen our focus on tenant retention and stakeholder management. We see promising opportunities ahead, particularly with our PV farm at Case Noyale and the potential to explore additional renewable energy projects. In Rodrigues, the upcoming airstrip project is poised to boost accessibility and tourism, opening new avenues for future development.
That said, we remain mindful of the complex business environment facing our tenants, shaped by geopolitical uncertainties, supply chain pressures, and rising costs in Mauritius. Our priority will be to maintain high-quality assets that support our tenants’ needs, ensuring that we weather challenges together and continue to grow as a community.
Acknowledgments
I extend my heartfelt gratitude to our Board of Directors for their continued guidance, and to Nicolas Vaudin and the management team for their swift decision-making and tireless efforts.
To Lavastone Properties’ shareholders and stakeholders, thank you for your loyalty and trust in us. We look forward to creating not just greener properties, but also building a legacy of responsible growth—one that reflects our care for our business, society and the environment.
Chairman
