Labour and Home Affairs Minister Terry Lister last night welcomed plans by XL Capital to team up with a local developer to provide housing for its staff.

And he disclosed another major exempted company has also contacted him with similar proposals.

The Royal Gazette revealed yesterday the insurance giant is considering joining Bermudian businessman Kevin Petty to develop the former Belmont Hotel site and to expand the Newstead Hotel if Mr. Petty buys it.

As an exempted company, XL is banned from doing business locally, but the company wants to lease an unknown number of the 70 homes Mr. Petty wants to build at Belmont for its own staff.

In December, Mr. Lister said international companies needed to consider linking up with local developers to ease the strain they put on the housing market when they bring in overseas workers.

Yesterday he told The Royal Gazette: “This is a very happy outcome. In December speaking to Bermuda Employers' Council I indicated we had grave concerns about the impact the growth of international business was having on housing in Bermuda.

“As we have gone six months, we have seen the housing situation become tighter and more stressed, simply through the growth of business.

“The move by XL, which appears to be in response to that, is a move in the right direction.

“I invited companies to look at the housing need to see if they could get together with local developers to develop housing that would take some of the stress of the local market and allow for the attractive housing of their staff.

“If XL is doing this in conjunction with Kevin Petty, this certainly is in line with what we have talked about then, and I would be very pleased with the outcome.”

He added: “I have had an application from another large company and I was very pleased when I saw that company was interested in doing it.

“I hope we will see groupings of companies coming together to provide housing for their staff to take the pressure off the locals.”

XL confirmed to The Royal Gazette it was in talks about becoming a minority shareholder in Mr. Petty's company Belmont Hills Development, which is developing the Belmont into a 50 room hotel and 70 houses and condominiums. Belmont Hills is also poised to buy the Newstead and increase the number of bedrooms from 40 to 140.

XL said it needed regulatory approval from the Ministry of Finance to move ahead with the plan.

Government's Department of Communication and Information said yesterday that the XL application was at an early stage and it was too early for the Ministry of Finance to comment.