Gafisa Acquires 70% of Cipesa

SAO PAULO, Brazil, Oct. 26 /PRNewswire-FirstCall/ -- Gafisa S.A. (Bovespa: GFSA3; NYSE: GFA), Brazil's leading diversified national homebuilder, today announced that it has acquired a 70% stake in Cipesa, the leading homebuilder in the state of Alagoas. Grupo Tercio Wanderley, one of the largest sugar and alcohol producers in the North/Northeast regions of Brazil formed Cipesa to develop real estate in that area. Since 2006, Cipesa has been an important partner to Gafisa, and under our current partnership agreement, it is expected that we will launch R$ 109 MM of new developments in 2007.

Gafisa and Cipesa will create a new company ("Cipesa Empreendimentos Imobiliarios") to be 70% owned by Gafisa and 30% owned by Cipesa. This new entity will serve as the sole vehicle for Gafisa and Cipesa to develop projects in the states of Alagoas and Sergipe.

Gafisa will capitalize Cipesa Empreendimentos Imobiliarios with R$ 50 million in cash and will purchase R$ 15 million of Cipesa's shares in the new company throughout a 1 year period. Additionally, Cipesa is entitled to an earn-out of 2% of the potential sales value (PSV) launched by the new company until 2014. This earn-out is capped at R$ 25 million. In consideration for its ownership position in the new company, Cipesa will contribute its entire R$ 1.5 billion land bank which represents eleven potential projects across all segments of the market.

"Cipesa is the undisputed leader in Alagoas with its strong brand identity, substantial land bank and extensive experience in the permitting and approval processes. We have had a very successful working relationship with Cipesa, having launched three projects since last November, "commented Wilson Amaral de Oliveira, CEO of Gafisa. "With our broad scope and scale, we are confident that this new venture will further create synergies that will allow us to expand our national footprint and sustain our growth."

"Gafisa started its geographic diversification several years ago, and is now in the second cycle of launches. We are already at the forefront of delivering completed developments in many new locations, such as Manaus, Belem, and Salvador among other places. This acquisition will add significant value to Gafisa as we continue to develop our attractive land bank and work with our important partners in expanding our national presence," concluded Mr. Amaral.

Conference Call Information: English Date: 10/29/2007 Time: 12:00 (US-EST) 14:00 (Brasilia) Phone: [phone]. Replay (available for 7 days): (1 973) 341-3080. Code (the same for the call/replay): 9398702 Portuguese Date: 10/29/2007 Time: 11:00 (US-EST) 13:00 (Brasilia) Phone: [phone]. Replay (available for 7 days): (55 11) 2101-4848. Code (the same for the call/replay): Gafisa About Gafisa

Gafisa is one of Brazil's leading homebuilding companies, focusing on residential markets. Over the last 50 years, we have completed and sold more than 900 developments and constructed nearly 37 million square meters, believed to be more than any other residential development company in Brazil. Gafisa is one of the best-known brands in the real estate development market, enjoying a reputation among potential homebuyers, brokers, lenders, landowners and competitors for quality, consistency and professionalism.

For additional information: Investor Relations Bruno Teixeira Phone: [phone] Fax: [phone] E-mail: [e-mail]: http://www.gafisa.com.br/ir Media Relations (US - Europe) Megan Hakes Reputation Partners Phone: [phone] Fax: [phone] E-mail: [e-mail] Relations (Brazil) Joana Santos Maquina da Noticia Phone: [phone] Fax: [phone] E-mail: [e-mail]