MOWLEM has set up a social housing business to target large urban regeneration projects.
Forming part of the contractor's building division, it will pitch for work in the growing major repairs and maintenance sector.
The business, which will be based in Nottingham and Leeds and has not yet been formally named, will concentrate on large-scale voluntary transfer schemes and those let under the Private Finance Initiative.
It will also look to work closely with local authorities and housing associations.
Chris Randle, managing director of the new housing division, said: 'The business has been formed because many urban regeneration schemes are too large to be handled by regional offices.
'This new division will give us the opportunity to develop specific expertise in this area.'
He added that the firm believed it was ideally suited to the sector because it could combine its experience in other PFI projects with its knowledge in the building and maintenance market.
Major contractors have been keen to grab a foothold in the sector since the government last month announced that it would be ploughing an extra £1.6 billion in public spending on upgrading and maintaining run-down council estates over the next three years.
'There is an enormous opportunity in the sector at the moment and we aim to develop the housing business as a market leader within the next five years, ' said Mr Randle.