The housebuilder, owned by Aberdeen Football Club chairman Stewart Milne, has put Edinburgh and east central Scotland at the heart of its expansion plans by launching a base in the Apex building at Haymarket.
The company expects to bring new developments on stream in the east of Scotland later this year following recent projects in Bonnyrigg, Prestonpans and Gorebridge.
SMG has more than 30 sites under development in Scotland and north-west England and plans to launch a further 20 in the next 18 months, noting that reservations are running 25% ahead of forecast so far this year.
The company's plans to deliver 5000 new homes in the UK in the next three years are being supported by a £225 million finance facility from Bank of Scotland.
The Edinburgh office will be led by Jonathan Fair, managing director of Stewart Milne Homes Central.
It will initially be staffed by three office-based personnel, including a land manager.
However the company said it expects to recruit further staff as new developments come on stream.
Mr Fair said the housing marketing is "recovering steadily after seven years of recession". He noted: "The increase in lending along with initiatives such as Help to Buy is enabling more consumers to buy and as a result more new homes are being built, but there is a considerable way to go to build the volume of homes required to meet demand now and in the future.
"There are indicators that prices are rising, although this is at varying rates across the country.
"Market conditions are indeed more favourable... and, as a developer with our base in Scotland, we are investing in the expansion of our locations to meet the country's demand for housing and the needs of consumers."
In its most recent accounts, SMG reported a pre-tax loss of £5.7m in the 12 months to the end of June.
It put the loss down to interest charges and £13.8m of exceptional costs linked to the sale of its construction arm to Kier Group, an exit from commercial development and a loss on an apartment block disposal in Liverpool.
Turnover was booked at £211m, with operating profit before exceptional items coming in at £20.5m.
At the time SMG noted the impact made by its exit from construction and commercial development work, but said its core homes and timber systems divisions were performing well.