Hi Peter,
I understand you want to create a A record or URL redirection record to redirect your sub-domain to format IP site.
Before moving on, I'd like clarify that, what office365 plan are you using now?
If you are using office365 P plan, to add/verify sub-domain to Office365 is unavailable in Office365 Plan P at this time.
If you are using office365 E plan, you can add/verify sub-domain in your current
custom domain. If you want to redirect your sub-domain to a format IP site, you can contact your domain register to help you add a URL redirection record in the control panel of your sub-domain.
Thanks,
Luke Yan