Strategic
Report
OUR FRAMEWORK GIVES FORM TO VISION
Strategic Report
OUR FRAMEWORK GIVES FORM TO VISION
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
Operational excellence
Maintain a revenue growth of 5%
Customer service & retention
Maintain at least 95% occupancy across the portfolio
Sustainability
Implement development projects in line with Green by Design principles
Maximise shareholder value
Explore new investment opportunities that rebalance our portfolio
Employee engagement
Maintain employee turnover below 5% and employee satisfaction above 85%
Colin Taylor and Nicolas Vaudin reflect on a year defined by steady progress and strategic focus — one that strengthened Lavastone Properties’ portfolio and its readiness for the next chapter
Q: Lavastone Properties delivered turnover and profit growth despite a challenging environment. What key factors drove this performance?
Colin: Lavastone Properties delivered a stable performance during a year marked by macroeconomic headwinds. Revenue, excluding sale of land, rose by 5.4% and operating profit by 6.1%, despite rising labour costs, supply chain pressures, and delays in project approvals linked to the government transition. These conditions affected tenant activity and slowed the pace of new developments across the industry, yet also highlighted the value of disciplined capital allocation. We treated each challenge as an opportunity to strengthen the resilience of our portfolio and ensure our long-term strategic priorities remain on track.
In a tightening environment, maintaining strong tenant relationships was crucial. We adapted lease structures where necessary, responded quickly to tenant needs, and ensured our spaces remained vibrant and fully utilised.
Nicolas: The results really speak to the team’s agility and deep understanding of the market. In a tightening environment, maintaining strong tenant relationships was crucial. We adapted lease structures where necessary, responded quickly to tenant needs, and ensured our spaces remained vibrant and fully utilised. We also pushed forward with our asset optimisation plan: completing targeted upgrades, securing new leases, and keeping our properties competitive. This approach allowed us to extract greater value from our portfolio, delivering a 98% occupancy rate even in a slower market, and positioning Lavastone Properties for the next phase of growth.
Q: What would you highlight as the past year’s most significant strategic milestones for Lavastone Properties?
Colin: This year, the Board undertook a comprehensive strategic review of our entire portfolio, reassessing its composition and the market dynamics shaping our sector. The review confirmed the opportunity to rebalance our portfolio, lowering exposure to the office segment while redeploying capital into assets with stronger long-term potential. In line with this, we completed the sale of our land in Trianon and are awaiting final approvals to conclude the disposal of a small industrial property in Plaine Lauzun, expected in early FY26. Looking forward, the Board is developing a strategic roadmap through FY30 that places greater emphasis on geographical diversification – an important step in mitigating concentration risk and capturing selective opportunities beyond Mauritius.
Nicolas: While topline growth was modest, the year was strategically significant as we planted the seeds for the next investment cycle: refining our assets to remain competitive and aligned with tenant needs, while also advancing on our long-term pipeline. A highlight was the launch of the Montebello Industrial Park project, now fully designed and prelet, and set to break ground in the first quarter of FY26. Once complete, it will add a modern, mixed-use industrial offering to our portfolio, setting the stage for diversified income streams in the years ahead. We also made solid progress at Case Noyale/La Gaulette, signing key tenants, including confirming Winners as the anchor tenant — a meaningful endorsement of the site’s strong retail potential. Overall, this was a year of both consolidation and positioning – ensuring we have the right foundations, partnerships, and project pipeline that will deliver sustainable returns over time.
Q: In light of this performance, how did Lavastone Properties deliver value to its shareholders?
Colin: Disciplined capital allocation remains central to how we create value. Every disposal and acquisition decision is guided by a long-term view, ensuring that we strengthen our portfolio of yielding assets while maintaining the flexibility to reinvest strategically. This approach enabled us to distribute Rs 54.4 million in dividends to shareholders this year, while preserving the financial capacity needed to fund our next cycle of growth.
Q: Could you share some of the operational highlights that drove performance?
Nicolas: This year, our operational focus was squarely on strengthening the resilience and long-term value of our assets. By keeping administrative and operating costs at 37% of revenue, we maintained efficiency, while investing in initiatives that directly enhance tenant experience and asset appeal.
Tenant-focused renovations continued across the portfolio, always in close collaboration with our tenants, ensuring that our spaces remain attractive, functional and aligned with their needs. Notable projects included ongoing upgrades for IQ-EQ at Les Cascades Building, improvements to public areas at EDITH, and the revamping of the conference and events venue at La Galerie du Génie, which is already generating a strong pipeline of bookings and reinforcing the site’s positioning as a multifunctional hub.
In hospitality, C Rodrigues Mourouk continued to perform strongly, with Constance Hotel and Resorts’ expertise and brand support contributing significantly to its success. The hotel expansion is progressing as planned, while the future extension of Rodrigues’ airport – featuring a new 2.1 km runway and upgraded facilities – is expected to facilitate both passenger and cargo transport, boost air connectivity and drive tourism growth, creating a positive backdrop for our operations.
Q: Environmental performance remains a strategic focus for Lavastone Properties. What progress have you made in advancing decarbonisation and sustainable operations?
Colin: Decarbonisation continues to be a strategic priority for the Group, both in how we consume resources and how we produce renewable energy. We have submitted applications to the Central Electricity Board for two photovoltaic (PV) farms at Case Noyale, which together are expected to generate around 2 MW of renewable energy
This project, currently under grid assessment by the CEB, represents both a contribution to Mauritius’s clean energy transition and a means to strengthen the sustainability of our portfolio.
Our built environment is equally critical to our sustainability journey. Buildings account for a substantial share of our energy use, so enhancing their efficiency has a direct and lasting impact on our carbon footprint.
Our built environment is equally critical to our sustainability journey. Buildings account for a substantial share of our energy use, so enhancing their efficiency has a direct and lasting impact on our carbon footprint.
Nicolas: We took tangible steps on that front during the year. What has been particularly encouraging is the alignment we are seeing across tenants and partners; there is now a shared understanding that sustainable buildings are not only better for the planet, but also more comfortable, efficient, and healthier spaces to work in.
We completed LEED gap analyses for our key properties, revealing priority areas for upgrades: reviewing the HVAC system at Absa House and enhancing fresh air circulation at Les Cascades Building. We are also supporting Cim Finance in the LEED certification process of Cim House, with data collection currently underway. By this time next year, we expect Cim House and Les Cascades Building to be well advanced in their certification journeys. Meanwhile, EDITH is preparing for recertification, working to uphold its LEED Gold (O+M) status which is expected to be obtained in December 2025.
LEED principles are also being embedded for all new developments from the outset, including at La Gaulette/Case Noyale and Montebello. Having anchor tenants like Winners, who lead in sustainability in their sector, will also reinforce high environmental standards across our portfolio.
Alongside these initiatives, we are strengthening everyday environmental practices, from improved recycling and composting, to the installation of smart meters. (More information in our ESG report on page 48).
Q: How is the Group investing in its people to support long-term growth?
Nicolas: Our people are at the heart of what we do. Our approach is to invest selectively but meaningfully, giving our people the tools, development opportunities, and support they need to deliver operational excellence and enhance tenant services. Over the past year, we undertook a thorough assessment of our teams, collaborating with Taylor Smith to review performance, training gaps, and succession planning. This exercise helped us identify where to upskill, streamline processes, and digitise workflows.
Our people are at the heart of what we do. Our approach is to invest selectively but meaningfully, giving our people the tools, development opportunities, and support they need to deliver operational excellence and enhance tenant service.
As the next step, we are rolling out a new performance management framework to strengthen employee engagement and accountability, while implementing succession plans for critical roles to secure continuity and readiness for key positions.
Q: What are the Group’s key priorities for the next 12 months?
Colin: FY26 presents both opportunities and challenges. We are carefully monitoring the potential impact of the 2025/26 Budget measures on our operations, particularly the Fair Share Contribution and Minimum Alternative Tax, while keeping our focus firmly on maintaining strong, high-quality assets and strategically diversifying the portfolio. As mentioned earlier, the Management’s directive will be to explore selective expansion opportunities, targeting around 10% of our portfolio outside Mauritius over the medium to long term.
Nicolas: FY26 is shaping up to be a dynamic year, with clear delivery priorities. These include initiating construction at La Gaulette/Case Noyale and completing the Winners fit-out, breaking ground on our new industrial building at Montebello, finalising the acquisition of an industrial property at Coromandel which we will redevelop, and advancing the C Rodrigues Mourouk Hotel extension, contingent on progress in Rodrigues’ infrastructure and airlift capacity. These projects will be executed hand-inhand with our tenants, ensuring that sustainability, resilience, and long-term value remain at the core of every initiative.
Q: What final message would you like to share with Lavastone Properties stakeholders?
Colin: I would like to thank the Board for its guidance and the management team, led by Nicolas the Managing Director and Alex the Head of Finance, for their continued dedication. Our focus remains on creating long-term value – responsibly, transparently, and sustainably – so that Lavastone Properties continues to deliver positive outcomes for all who place their trust in us.
Nicolas: My sincere thanks go to our people, tenants, and partners for their unwavering support. It is through their commitment and shared sense of purpose that we continue to grow stronger as an organisation. Together, we are building a Lavastone Properties that not only performs well while also contributes positively to its communities and environment.