Developing or refurbishing buildings for lease

Developers of commercial property will generally want to secure an 'anchor tenant' or tenants before they commence the design and construction or refurbishment of a building. They will do so by entering into an agreement with the tenant or tenants to "design, build and lease" the building.

An 'agreement to design, build and lease', is an agreement between a landlord and a tenant that provides for the tenant to lease a premises (or part of a premises) from the landlord following design and construction of the premises by the landlord.

For the tenant it will ensure a purpose-built facility (save for any tenant fitout work that is to be carried out by the tenant). For the landlord it will help provide the necessary tenant commitment and construction detail that the landlord requires to commence construction.