i was able to get the unifi AP up and running on a sophos xg85 LAN side network.
1. keep the unifi controller on dhcp
2. create a dhcp on sophos and assign a range within the LAN subnet.
3. in my case i have a DNS server running with AD DC.
4.assign a dhcp range in unifi which is a different subnet than the sophos
5. now sophos will assign ip address to any wifi device connected to unifi and it works
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