Property pointers: top five M&A tips from a property perspective

Real estate considerations are crucial in M&A transactions; they can significantly impact the value and success of the deal, as well as the timing. In this instalment of our M&A tips series, we share our top five tips for ensuring a smooth M&A process from a property perspective.

1. Understand the importance of the property to the business

It is important to have a clear understanding of the nature and function of the property in question and its impact on the business’ operations. For example, a specially equipped freehold site - such as a data centre or healthcare facility - will typically be more valuable and far more difficult to replace than a short-term lease of a standard office space.

Sellers should provide comprehensive details regarding the property assets and their strategic importance to the business.

Buyers should evaluate the importance and specialist nature of the property as soon as possible, and tailor their due diligence approach accordingly.

2. Review lease terms

Any existing leases will transfer with the company, so it is important to review them carefully for any terms that could impact the transaction. Key provisions to look out for include rent reviews, break clauses and repairing obligations, all of which may have financial or operational implications.

Sellers should ensure that all leases are up-to-date and disclose them in good time.

Buyers should assess the terms of existing leases to identify any terms that could affect the transaction or the future operations of the business.

3. Check if any consents are required

Many leases require landlord consent before they can be assigned and in some cases consent may also be required in the event of a change of control. Obtaining landlord consent can be a time-consuming process, and failure to secure it could give rise to a right for the landlord to forfeit the lease, which could have serious business implications.

Sellers should identify any leases that require landlord consent and begin engaging with landlords early to secure the necessary approvals, helping to avoid delays later in the process.

Buyers should carefully review lease terms for assignment and change of control provisions and ensure all required consents are in place prior to completing the transaction.

4. Be alive to potential liabilities

Property related liabilities - including environmental risks such as potential contamination and the associated costs of remediation - can present significant challenges in M&A transactions. It is important to understand the condition of a property and any ongoing maintenance obligations and/or upgrades that may be required. These things can have a direct impact on future costs and operational efficiency.

Sellers should disclose any known liabilities early in the process and provide copies of relevant audits, surveys and reports that highlight potential issues.

Buyers should consider whether it is appropriate to conduct thorough technical due diligence alongside legal due diligence. Depending on the nature of the property, this could include environmental site assessments, structural surveys and a review of the property's compliance history. This will allow them to identify and mitigate risks and assess the likely costs of any necessary repairs or upgrades, helping avoid unexpected expenses post-completion.

5. Consider tax implications

There can be significant tax implications which arise as a result of the transfer of property ownership, and these should be factored into the structure of the transaction at the outset.

Sellers should seek early advice on how best to structure transactions involving property assets to fully understand and manage any tax consequences.

Buyers should carry out appropriate financial and tax due diligence to identify potential risks and ensure all tax-related matters are properly addressed before completion.

By addressing these five areas early and openly, both sellers and buyers can navigate the property-related complexities of M&A transactions more effectively, ensuring a smoother process and maximising the value of the deal. Farrer & Co’s Property team is well equipped to support private M&A transactions, with specialists across residential, rural and commercial property, as well as experts in construction, planning and environmental matters.

For further information about the issues raised in the article, please contact any of the authors.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, September 2025