Profile: Gafisa S.A. (GFA)

Gafisa SA (Gafisa) is a Brazil-based company engaged in homebuilding and real estate operations. Its core business is the development of residential buildings. It is also engaged in the development of land subdivisions, also known as residential communities, and entry-level housing. In addition, it provides construction services to third parties. Gafisa is present in 18 states and 40 cities and works on all residential segments together with its extensions: Alphaville Urbanismo SA, Fit Residencial Empreendimentos Imobiliarios Ltda and Bairro Novo Empreendimentos Imobiliarios SA. Gafisa also owns such subsidiaries as Cipesa Holding, Gafisa SPE 22 Ltda and Res. das Palmeiras SPE Ltda, among others. During the year ended December 31, 2008, the Company acquired Tenda.

In March 2007, Gafisa began to operate in the lower income real estate market, through one of its subsidiaries, FIT Residencial Empreendimentos Imobiliarios Ltda. (FIT Residential). On March 26, 2007, the Company, together with Odebrecht Empreendimentos Imobiliarios Ltda., formed Bairro Novo Empreendimentos Imobiliarios S.A. (Bairro Novo), a jointly controlled entity. In November 2007, Bairro Novo launched property developments directed at the Brazilian lower income market, called Bairro Novo Cotia. On October 26, 2007, Gafisa completed the acquisition of 70% of Cipesa Engenharia S.A. (Cipesa), which is a real estate developer in the state of Alagoas.

Real Estate Activities

The Company’s real estate business includes developments for sale of residential units, land subdivisions (also known as residential communities) and commercial buildings; construction services to third parties, and sale of units through its brokerage subsidiaries, Gafisa Vendas and Gafisa Vendas Rio, jointly referred as Gafisa Vendas. In the residential buildings product category, Gafisa develops three types of products: luxury buildings targeted at upper-income customers; buildings targeted at middle-income customers, and entry-level housing targeted at lower-income customers. Quality residential buildings for middle and upper-income customers are its core products. Luxury buildings are a high-margin niche. Units usually have over 180 square meters of private area, at least four bedrooms and three parking spaces. The development includes swimming pools, gyms, visitor parking, and other amenities.

Commercial Buildings

Buildings targeted at middle-income customers accounts for the majority of Gafisa’s sales. Units usually have between 90 and 180 square meters of private area, three or four bedrooms and two to three underground parking spaces. Entry-level housing consists of building and house units. Units have between 42 to 60 square meters of indoor private area and two to three bedrooms.

Commercial Buildings

As of December 31, 2007, the Company had two commercial buildings under development for sale. These include Sunplaza Personal Office and and Icarai Corporate, both in the state of Rio de Janeiro. In December 2007, the Company delivered the Eldorado Business Tower in Sao Paulo, an office building developed in partnership with Sao Carlos Empreendimentos e Participacoes S.A. and Banco Modal S.A.

Construction Services

Gafisa provides construction services to third parties, building residential and commercial projects for the developers in Brazil. The Company’s principal construction services clients are companies, many of them developers that do not build their own projects. The Company also provides construction services on certain developments where it retains an equity interest.

The Company competes with Cyrela Brazil Realty S.A., Empreendimentos e Participaçoes, Rossi Residencial S.A., Even Construtora e Incorporadora Ltda and Klabin Segall S.A.