Staff at Ernst & Young Ltd. (E&Y) are set to move offices into the vacant space in XL House, The Royal Gazette can reveal.

The accounting firm, which is currently based in Reid Street, Hamilton, will move its employees to XL Capital's headquarters in Bermudiana Road at the start of 2010, an E&Y spokeswoman confirmed.

This follows The Gazette first breaking the story in January about XL instructing Coldwell Banker Bermuda Realty to sub-let its North Tower to prospective tenants.

International companies like XL and American International Group (AIG), who also requested the realtor to market space on its ground floor at the AIG Building in Richmond Road, are not generally permitted to do business inside Bermuda.

But the law allows for them to be given permission by the Finance Minister to rent out their real estate under the Companies Act 1981, allowing the firms to optimise the utilisation of their office space, with XL, AIG and Ace all having the relevant consents held on company files in the Registrar of Companies and and available for public inspection.

"We can confirm that Ernst & Young Ltd. will be leasing commercial office space from XL, through its subsidiary XL Property Holdings Limited, in Tower 2 of XL House on Bermudiana Road," said the spokeswoman. "Ernst & Young Ltd.employees will move to XL House beginning in 2010.

"At this early stage we are still working out the details."

It comes at a time when many firms are looking to scale back on their operations and consolidate through relocation to smaller premises or to get more value for their money, with a number of new and existing prime office spaces becoming available and several others set to open in the future.

These include The Power House in Par-La-Ville Road and Sir John Swan's 141 Front Street building.

In January, E&Y reportedly released between seven and 20 staff as a result of the impact of the economic downturn on its business.