Kendra Arnell - Manager APS Projects APS INTO THE FUTURE Thank you for joining us today My name is … Today I would like to tell you more about the financial side of APS and how we work on day to day basis to maintaining and growing value for our participants THE FUTURE OF PROJECTS Kendra Arnell - Manager APS Projects

Mary’s Fancy Plantation / De Castro Oryx Residences Professional Office Park APS REAL ESTATE DEVELOPMENT PROJECTS

MARY’S FANCY PLANTATION / Business model: Lease revenue from renovated monuments Boutique hotel, Restaurant, Culture / Art niche Heritage preservation/ Tourism Niche market Added value for SXM  diversifying supply of on-shore activities MARY’S FANCY PLANTATION / DE CASTRO

ORYX RESIDENCES Business model: Direct revenue from sale of 62 units combined with long term revenue from mortgage loans APS in control, hire expertise needed.

PROFESSIONAL OFFICE PARK Business model: Continued lease revenue from existing office units Future rental cost savings for APS by developing and relocating main office APS Future additional lease revenue commercial real estate Future direct sales from residential real estate APS on core business, hire expertise needed. i.e. property mgmt. PROFESSIONAL OFFICE PARK

Added value real estate /development projects Risk of owning real estate and developing / building Assessing development potential Maintaining affordability Overview of next few slides OUTLOOK TO THE FUTURE

ADDED VALUE Contribute to APS’ strategic goals by: - Generating investment returns for the Fund - Increasing pension capital - Realizing investment in people and community - Getting persons in their own home - Contributing to SXM housing inventory - APS added value for participants now - Shaping communities But why would a pension fund do something like invest in real estate? Would not be done if it did not lead You heard earlier about APS’ strategic policy. Part of the policy framework is to contribute Invest in people and community. Housing development, heritage preservation Invest in community, people Contribute to housing inventory on island Make homes available to i.a. participants of Fund Make financing available to participants of the Fund (sub)contractor job opportunities Building community: communal courtyard MFP: heliofytenfilter Oryx: STP

RISKS Disaster Hurricane Fire Vandalism Mitigants Work with reputable companies Process transparency, due diligence Insurance Market Sales / lease revenues not forthcoming Sales / lease revenues not cost covering Construction Cost overruns Flight risk Time delays

DEVELOPMENT POTENTIAL - NOT ALL LAND IS CREATED EQUAL - Constraints: zoning, setbacks, slope, parking policy, spatial etc. What can we build? Financial: acquisition costs, development costs versus potential revenue. Assessing development potential Choosing the right business model. What may seem like a large tract of land, may be reduced to the tiniest of parcels when taking into consideration…setbacks, steepness, … Loss of land Purchase costs of land Development costs >USD 500 /m3 What do we think we can get out of it? # units for sale /lease? Physical constraints Revenue per unit market constraints Can we afford to build? DEVELOPMENT POTENTIAL - NOT ALL LAND IS CREATED EQUAL -

AFFORDABILITY GOAL Factors Sales / Lease revenue >> acquisition / development costs Marketable  affordable for buyers Goal: 1) Sales revenue /Lease revenue >> acquisition & development costs Ultimately APS has to see returns on investment But not at all costs and definitely not at the cost of affordability for our participants! 2) Affordability also important! Affordability in terms of development /sales price, costs of financing, costs of ownership Consideration needed for a number of external variables (disposable income, how much can an individual borrow); will come back to these on next slide: Costs of maintaining value Costs of purchase Lease / sales prices Costs of ownership / tenancy Factors

- HOME OWNERSHIP / TENANCY SHOULD NOT BE AN EXCESSIVE BURDEN! - Development costs Risk appetite financers Costs of purchase Equity to bring in We don’t want home ownership to be a burden -Costs of ownership /tenancy: maintenance & repairs, insurance, HOA fees, costs of living Partnership with contractor  build in bulk /reduce construction costs, reduce duration: building methods, value engineering, materials choice APS needs to recoup investment costs Buyer has other expenses to consider Some factors are completely out of everyone’s control Borrowing capacity potential buyers Out of pocket costs: Notary Taxes Life insurance AFFORDABILITY - HOME OWNERSHIP / TENANCY SHOULD NOT BE AN EXCESSIVE BURDEN! -

AFFORDABILITY Costs to maintain value of home / leased unit -Homeowner /content insurances -Maintenance & repairs -Uniformity -Costs of ownership /tenancy: need to be able to keep the lights on, feed the family, send th ekids to school otherwise truancy officer comes knocking…. So it’s not just bout getting in the home, it’s also about staying in it -maintenance: don’t forget mortgaged property… value of collateral is important. Doint it all alone, might get pricey… HOA: protect interest of homeowners and investment, also shared burden of maintenance & repair costs Costs to stay in home / leased unit -Disposable income - individuals & businesses -(Re)Payment capacity -Daily living /operating expenditures

APS FORMULA House & 100% mortgage financing  partnership with BdC Collective insurance  partnership with insurance companies Pooled maintenance & repairs (partially)  HOA establishment, mandatory membership & all-in payment Owner = tenant  duty of care Residence “extendability”  adapt with owners’ needs Residence “convertabiliy”  additional income generation APS also look at 1) other spinoff revenue to subsidize total revenue -Partnerships: mortgaging 2) Other ways to make affordable Partnerships: -insurance  bulk insurance -bank  mortgage administration HOA: reduce costs of maintenance  pooled Extendability /income generating potential: design

PROJECTS CONTRIBUTING TO OUR FUTURE Thank you!