Listed German property firm TAG Immobilien has sold a project development site of around 15,000 m2 located on Tübinger Strasse in Munich for a total of EUR 31 mln.

The property, which was formerly used by Siemens, was owned by TAG's Gewerbeimmobilien-Aktiengesellschaft unit and sold to a local property developer. The deal is expected to add more than EUR 7 mln to the company's net income for 2011.

TAG will use the proceeds from the sale to pay off loans in its commercial portfolio and create financial leeway for future acquisitions.

'The sale of this property at nearly 50% above its book value shows that our strategy of careful asset management in the commercial portfolio makes excellent sense,' commented CEO Rolf Elgeti. 'It also improves the group's cash flow position and further reduces our Loan to Value.' The asset was sold after having secured the targeted zoning permission which significantly improved the value of the asset, the company added.

With a market capitalisation of some EUR 400 mln, TAG focuses on residential and commercial real estate in German metropolitan regions as well as the provision of real estate services.