The success of a property development is very much dependent on whether, or the degree to which, the completed building will be accepted for use by tenants in the property market. The letting agent, with detailed market knowledge tries to persuade and negotiate with prospective tenant(s), already known or found by promotion, in order to let the building with favourable lease terms for the developer, although some incentives may be offered to tenant(s) depending on marketplace condition at that time or expected in the near future.
In fact, pre-letting of whole or part of the building enables the developer to reduce the chance of incurring development profit failure but may reduce the size of his profit at time of completion of the development. In this phase, the developer should also pay attention to leasing to as high quality tenant(s) as possible and the constituents of clauses in the leasing covenants. These features constitute the investment quality of a let property and thus will affect the amount and security of the rental income flows, as well as affect the value and sale price of the project when being put up for sale.