Persimmon plc has formed a new subsidiary company to meet the demand towards city centre living head-on.

The York-based developer - UK's fourth-largest housebuilder - has set up Persimmon (City Developments) Ltd to concentrate on bringing life back into Britain's cities through redeveloping urban land to meet today's housing needs.

Steve Watt, managing director of Persimmon's Thames Valley region, who heads up the new company, said: "As land becomes an increasingly-rare commodity, we need to look at developing or refurbishing existing areas and the formation of a new company demonstrates our commitment to that.

"We recognise that the nature of developing brownfield sites is usually quite different, involving greater management time, higher professional costs and specialised building techniques."

Persimmon's chief executive, John White, said: "Nationally, we build over 50 per cent of properties on brownfield sites and the figure is far higher in the South at over 80 per cent. The Government's Structure Plan recognises that 4.4 million new homes need to be built by 2016, and as this will inevitably have an impact on land availability in the UK, it is essential we think ahead.

"There is a trend towards modern, converted properties which has emerged over the last 10 years and as a company we pride ourselves on providing a range of homes to meet diverse homebuying needs."

Persimmon (City Developments) Ltd, based in Buckinghamshire, will use its expertise gained form its Inner London schemes to benefit all subsidiaries, looking at major cities nationwide.

Meanwhile, sales of Persimmon's homes in 1999 are 10 per cent ahead of those at the corresponding period last year. Speaking at the company's Annual General Meeting, held in London, chairman Duncan Davidson said: "The outlook is very encouraging and we are confident that as long as the market continues at current levels, another good result will be achieved this year."

Regarding the new company, Mr Davidson said: "Our planned increased activity in this development will assist the continued growth of Persimmon and ensure we maintain our position as a major participant in the housing industry into the new Millennium."

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.