A pre-let is a lease agreed before the building is finished – sometimes before construction has even started. The occupier commits to space that exists on drawings; the developer converts that signature into bank finance and a construction start. Signing early buys influence over the specification and certainty of delivery in tight markets – paid for with delivery risk and a rent fixed today for a building of tomorrow.
What a pre-let actually is
Legally, the instrument is usually an agreement for lease: a binding contract under which the landlord must build and the tenant must take the lease once agreed conditions are met – typically practical completion certified, consents in place, sometimes a fit-out slot delivered. The lease itself only begins when the building does. The mechanism should not be confused with build-to-suit, although the two overlap: a build-to-suit scheme is designed around one occupier and is by definition let in advance, while an advance letting can just as well capture a unit in a speculative park that happens to be under construction. The distinction matters commercially. In the first case the tenant shapes the whole building; in the second the tenant is early in the queue for a standard product – with correspondingly less influence and less obligation. In both cases the agreement, not the handover date, is when the negotiating power is spent, which is why the commercial terms belong in carefully drafted heads of terms before anything is signed.
Why developers pay for your signature
Speculative construction is a bet financed with expensive money, and a signed occupier converts the bet into an income stream a bank can lend against. That is the entire economics of the pre-let: the developer sells certainty to its financiers and buys it from the tenant. The Slovak market shows the mechanism in real time. According to the Cushman & Wakefield Industrial MarketBeat for the first quarter of 2026, 203,200 square metres are under construction in Slovakia at just 35 per cent pre-lease – an unusually speculative pipeline for this market. The same report’s completions table shows both ends of the spectrum: CTPark Kosice delivered 26,500 square metres fully pre-leased, while Besico Kechnec arrived at up to a quarter committed. And the quarter’s headline lease transactions include an e-commerce advance commitment at Mountpark Bratislava in the 20,000 to 35,000 square metre bracket. Across the border, the Czech MarketBeat lists P3 Bilina and 7R Park Lavicky – each roughly 25,000 square metres – as pre-lease deals: in the tightest CEE market, advance commitments are how space that does not yet exist gets allocated.
What the occupier gains
Three things, in rising order of value. First, certainty of supply: in a market where vacancy runs low – or where the specific corridor you need has nothing standing – signing early is often the only way to secure a modern unit on your timeline rather than the market’s. Second, influence over specification: commit before the steel is up and the doors, office content, power allocation, floor loads and clear height can still be adjusted at marginal cost, where the same changes after completion would be expensive or impossible. Third, negotiating position: your covenant is what unlocks the developer’s finance, and that is worth money. An early-committing tenant with a strong balance sheet can push for a longer rent-free period, a larger fit-out contribution and delivery guarantees that a tenant walking into a finished building never sees. The developer needs the first signature far more than the last one – occupiers who understand that price their commitment accordingly.
What the occupier risks
The risks mirror the gains. Delivery risk comes first: the building may be late, and every month of slippage is a month your operation has nowhere to go – which is why delay remedies matter more than almost any other clause. Market risk comes second: the rent is fixed at signing, and if the market softens between signature and handover, you open in a building priced above the street. Slovakia is currently a live illustration – prime rent eased to EUR 5.30 during the first quarter, so a commitment made at the top of the market can look expensive by completion. Specification risk is third: what you agreed is what the schedule of specification says, not what the brochure implied, and drift between the two surfaces at handover when it is hardest to fix. Finally there is conditionality: agreements for lease hinge on conditions precedent – planning, finance, sometimes anchor lettings – and an occupier who has built its logistics plan around a conditional building needs a fallback if a condition fails. None of these risks argues against committing early; all of them argue against doing it on the developer’s standard form.
The Slovak angle: five clauses that decide the deal
For a Slovak advance letting, the checklist is short. First, the long-stop date: the fixed calendar date after which, if the building has not reached practical completion, the tenant may walk away – without it, “late” has no legal meaning. Second, delay compensation: liquidated damages or rent credits per week of slippage, because the right to terminate is useless three months into a relocation. Third, rent commencement mechanics: rent should run from actual completion plus any agreed fit-out period, never from a calendar date the builder can miss. Fourth, the specification schedule: every load, dimension and power figure in an annex with a change-control procedure, so the delivered unit is measurable against the promised one at snagging. Fifth, the indexation base: with a year or more between signing and opening, whether indexation starts at signature or at completion changes the opening rent – in an inflationary stretch, materially. Each of these is negotiated at the heads of terms stage; by the time lawyers hold the agreement for lease, the answers are usually already fixed.
Frequently Asked Questions
Is a pre-let the same as build-to-suit?
No. Build-to-suit describes the product – a building designed around one occupier’s requirement. The advance letting is the contract mechanism, and it also covers standard speculative units signed before completion. Every build-to-suit involves letting in advance; not every advance letting is build-to-suit.
When does rent start under a pre-let?
Whatever the agreement for lease says – which is the point. Well-drafted deals run rent from certified practical completion plus any agreed fit-out period, often softened by a rent-free period. Poorly drafted ones name a calendar date and leave the tenant paying for a building site.
Is the rent cheaper if I commit early?
Not automatically – the headline rent is often close to the market rate, because the developer’s lenders want to see market pricing. The early tenant’s advantage usually arrives as incentives instead: longer rent-free, bigger fit-out contributions, delivery guarantees. In a softening market, though, a rent fixed early can end up above the street by opening day.
What happens if the building is delivered late?
Whatever remedies were negotiated: typically liquidated damages or rent credits per week of delay, with a long-stop date allowing termination in extremis. Without express provisions, the practical answer is often “very little” – which is why delay clauses are the heart of any advance commitment.
How early do occupiers typically sign?
Anywhere from shortly before completion to well before ground-breaking. The earlier the signature, the more influence over specification and the stronger the incentive position – and the more delivery and market risk taken on. The sweet spot depends on how replaceable the requirement is: unusual specs argue for signing early, standard boxes for waiting.