Together with

Contents

• EDITOR’S RAMBLE 🗣

• FEATURED REPORT 📰

• OPEN TABS 🌐

• STUFF THAT MIGHT HELP YOU 👌

EDITOR’S RAMBLE 🗣

When I was a trainee, a lot of my time was spent in data rooms. They’re basically secure online folders – like a big Google Drive – which contain a bunch of documents.

It was tiring at times. Hours of opening documents, reading them, sending them to different lawyers, collating their comments...

But it was one of the first times I felt valuable. Because anything that we spotted went into the client’s due diligence report. And that report helps them make an informed decision on what they’re about to buy.

I’m so excited that we’ve partnered with Dentons on today’s newsletter.

In researching for this, we spoke to Jen, who (among other things) helped manage the data room as a first-seat trainee working on this deal.

A £54 million deal can feel quite distant when you’re applying for training contracts.

Hearing what someone is actually expected to do as part of their first seat (hopefully) makes it easier to picture yourself being there.

Once you’ve read it, please vote in the poll below the report (it takes 2 seconds). Your comments are what let us keep partnering with firms like Dentons – and I reply to every one.

– Idin

FEATURED REPORT 📰

🏬 How Dentons helped buy a £54 million building (without actually buying it)

What’s going on here?

In May last year, Praxis – a company that owns and runs shopping centres – bought Glasgow’s St Enoch Shopping Centre for around £54 million.

The shopping centre covers around 830,000 square feet next to Glasgow Central station and has roughly 100 shops and businesses (known as “occupiers”).

Here’s the building 👇

Dentons advised Praxis on the deal. We spoke to the law firm’s deal team, which was based in Scotland, to find out what that work looked like from the inside.

But this was not a direct purchase of the building: Praxis bought every unit in the trust that held it. What that means – and why the structure can save millions in tax – is the story of this deal.

Why was the deal not a direct purchase of the building?

Praxis had two ways to acquire St Enoch.

🏢 Option 1 – Buy the shopping centre itself. The buyer acquires the land and building directly. Its lawyers would:

1. investigate the title,

2. review the leases and other rights affecting it,

3. negotiate the transfer, and

4. register the change of ownership.

📦 Option 2 – Buy all the units in the trust that holds the shopping centre. A unit trust is a sort of legal wrapper that owns the building on behalf of investors. Ownership of the trust is split into units, which investors can buy and sell – like shares in a company.

St Enoch was held in this kind of trust. Buy every unit and you control the trust and everything it holds. Praxis chose Option 2 – it took control of St Enoch without the building itself changing hands.

Deals are typically structured this way to save tax. One possible saving here was Land and Buildings Transaction Tax.

Why was this harder than it looked?

Three things made this more challenging than an ordinary property purchase.

📜 Praxis was buying a trust with a history, not just a shopping centre. That meant Dentons had to investigate the trust as well as the building. The Dentons team explained to us that trusts are “living, breathing entities” – their finances keep moving even while you’re buying them, so even the price might not be final (more on that below). For example, a decision made years ago could still create a bill today – say, a tax the trust should have paid but didn’t.

💰 Praxis used bank funding for the purchase. This meant the deal had to satisfy the bank as well as the seller. Banks are usually more cautious than their customers. Praxis might think a risk is worth taking where its bank wouldn’t. The difficult part is timing. Banks often become involved late in a deal, after big decisions have already been made, so the lawyers have to anticipate what the bank will accept before they can ask it.

🏦 The sellers were lenders who had never planned to own a shopping centre. The previous owner had also borrowed money from lenders to buy St Enoch, using the building as security for the loan. Then the value of shopping centres fell, and the building became worth less than the debt. At that point the lenders used their legal rights to take control of it.

So Dentons wasn’t negotiating with an ordinary property company. It was negotiating with a group of lenders selling a property they’d never chosen to own. Lenders in that position often know very little about the property, or the trust that owns it. They are therefore likely to give very few warranties – these are contractual promises that certain facts about what you are buying are true (for example, “the trust has paid all its taxes”).

How did Dentons protect Praxis?

Here are three main tools that Dentons used to help Praxis buy the trust safely.

🔍 Before signing the contract, Praxis needed to find out exactly what it was buying. That investigation – due diligence – ran on two levels, looking to spot any potential issues.

First, Dentons investigated the shopping centre itself. Its lawyers reviewed the leases in place with roughly 100 current occupiers. They also checked who legally owned the property, what planning permission it had and whether it met building rules.

Second, they investigated the trust that owned the centre. They checked its responsibilities to employees, its tax position, its borrowing and any legal disputes that were still continuing. Accountants worked alongside them. BDO – a large UK accountancy firm – ran the financial and tax due diligence and reviewed the numbers in the sale contract. Because a seller in that position (a lender that never chose to own the asset) can promise very little, Praxis had to rely on what its advisers could uncover.

📝 At signing, the contract had to decide who carried each risk. Because Praxis was buying the trust, not just the building, the sale contract had to reach much further than an ordinary property contract – far enough to cover the trust’s past liabilities, its tax position and its borrowings. Putting that contract together was Dentons’ job.

Two tools do most of the work – warranties (which you have already met) and indemnities.

The difference comes down to whether the problem has been found yet. If due diligence uncovers a specific risk, the buyer can demand an indemnity for it (or a price reduction). Warranties cover the unknowns – the problems nobody has found.

Dentons had to negotiate as much of this protection into the contract as the sellers would agree to give.

💷 The price could still change after the deal was completed. Buying a trust means taking on finances that keep changing, so the contract had to allow the price to be adjusted. That was the job of completion accounts – a final set of figures, prepared after the sale, showing what the trust was actually worth on the day it changed hands. If those figures showed Praxis had paid too much or too little, an adjustment payment would settle the difference. This was one part of the deal that the lawyers didn’t lead – it was the accountants working out those figures, and Dentons turned that process into contract terms both sides had to follow.

What did Dentons’ lawyers actually do day-to-day?

Dentons fielded a large real estate team, supported by lawyers across corporate, tax, funding, construction and planning, led from Glasgow by real estate partner Brian Hutcheson.

🧭 Six legal teams had to work together efficiently. Each team looked at a different part of the same deal, so one team’s finding could change everyone else’s advice. Regular meetings and emails kept them aligned.

But this communication had to be carefully managed. Lawyers charge for their time, and the team worked to an agreed fee budget. So they had to balance that – enough communication that nothing slipped through the gaps, while keeping overall time (and cost) down.

🏗️ Dentons had to make sure they reported the important issues (not every problem). Due diligence exists to uncover problems that might affect the purchase, not to capture every tiny issue. Dentons therefore agreed a de minimis threshold – a cut-off point below which an issue was considered too small to include in the main report. That kept both the lawyers’ time and Praxis’s attention on matters that could meaningfully affect the deal.

For example, the centre had recently been extended, in a programme costing £55 million. Documents from a project that size were worth reporting on. Minor building work on some of the smaller shops was not.

🧮 The lawyers worked closely with the accountants. Completion accounts were not the only part of the deal based on financial calculations. The deal also included financial covenants – promises Praxis made to the banks lending it the money. These promises were measured with financial figures, such as how much debt the trust could carry. Accountants took the lead in working out these numbers. A lot of this deal was negotiated by lawyers and accountants working side by side.

What did the trainees and junior lawyers actually do?

A shopping centre with around 100 occupiers creates a huge amount of legal work. Dentons’ trainees and junior lawyers helped keep it all moving.

📥 They managed the documents. New files arrived every day. The juniors on the deal team downloaded and organised them, then sent each one to the lawyers who needed to see it. With six specialist teams involved, this helped everyone give advice based on the same information.

📑 They reported on most of the leases. A shopping centre makes its money by leasing space to businesses, which pay rent. The leases set out how much each occupier pays, how long it can stay and what it’s responsible for. This was part of the due diligence process, described above. Every lease had to be reviewed and reported on. For the lower-value leases, the reporting was deliberately lighter, and the junior lawyers ran it under supervision. This gave senior lawyers more time to look through the most valuable leases.

🗂️ They checked what the trust owned. Junior lawyers reviewed many of the property ownership documents. They confirmed which land formed part of the shopping centre, how it could be used and whether anyone else had rights over it.

✅ They helped get the deal over the line. As completion approached, the junior team maintained the checklists covering every document, signature and action needed to finish the purchase. They checked the documents, making sure nothing needed for a £54 million deal was missing.

What bigger trends does this deal show?

There are three wider lessons you can take from this deal.

📈 The worst may be over for shopping centres. Shopping centres had a very difficult decade. Online shopping took customers away from physical stores, COVID forced centres to close for long periods and property values fell sharply. Some owners could no longer repay their loans, so their lenders took control of the centres.

Many people in the market now believe prices have reached their lowest point, and won’t drop much further. Buying while prices are still falling is risky, because the property may soon be worth less than you paid – but buying at the bottom means the bad news is already in the price.

🍔 Investors are becoming more interested in retail parks, instead of central shopping centres like St Enoch. A retail park is an out-of-town group of large shops, usually built around a free car park. Many shoppers like them because they can drive there, park easily, buy what they need and leave.

Investors have followed the shoppers – more visitors make a property more valuable. This is the trend the Dentons team says matters most in retail property: consumer behaviour ultimately decides which locations investors will back. Retail parks may also have spare land that can be used to make extra money. For example, building a Burger King on an unused part of a car park can turn empty space into a new source of rent.

St Enoch is another kind of property. It’s central, covered, and reached mostly on foot. So Praxis has put its money into the kind of centre much of the market is currently looking past.

📍 Major property deals don’t only happen in London. Dentons ran the St Enoch deal from its Scottish offices, led from Glasgow. And it was no one-off. In 2024, the firm’s Scottish team also handled a £500 million portfolio acquisition.

At the right firm you’ll see deals of national scale run out of Scotland too. This one took six kinds of lawyer working together – and a training contract at Dentons could put you on the next one.

Please do vote and share a reason. It takes 2 seconds, and your comments are what let us keep partnering with law firms. Also, I reply to every comment.

OPEN TABS 🌐

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