A construction group has launched a development company to take advantage of a thriving property sector in the region.

Castle Vale Properties is being set up with a £20m fund to be invested in projects in its first year of operation, with the backing of existing commercial builder York House Construction, of North Yorkshire.

The venture is already negotiating deals on two business parks, student accommodation, a retail park and a residential mill conversion.

Martin Foster, a property expert, and former director of international property group Savills, has set up the company with the backing of York House. The 39-year-old will head the firm, which is based at York House Construction, in Brompton-on-Swale, near Richmond.

More than £20m will be invested in projects in the company's first year of trading.

York House Construction, which also has offices in Leeds, is one of the county's major construction companies.

It works in industrial, commercial, retail, residential and educational projects and was founded only five years ago by directors Andrew Bruce, Frank Kofler and Jim Grice. Its annual turnover has grown to £32m in that time.

Group managing director Andrew Bruce said of Castle Vale: "We regard a property development company as a natural progression for our continued growth, and a route into new market sectors.

"We are delighted to attract a man of Martin's calibre to head up the new business and, with him on board, we also plan to develop joint venture projects with our existing clients to maximise their opportunities in a buoyant, if highly competitive, market."

Mr Foster said: "The commercial property sector in this region remains exceptionally buoyant and we're launching with a number of strong development opportunities that we plan to complete in the first 12 months of operation.

"These include a vibrant mix of retail, commercial and local authority schemes as far afield as Tyneside and Humberside and at many points in between. We have unique skills and experience in the PFI sector and we are particularly targeting public bodies looking for innovative project solutions from their necessary and significant expenditures."

Before his five-year spell with Savills, Mr Foster ran development company Foster Bowden for four years, and made his name with ventures including the relocation of Bootham Engineers in York and a major build project for Teleware. He also worked on the redevelopment of York's main leisure centre, the Barbican.