Terra Firma, the investment vehicle run by UK financier Guy Hands, on Tuesday sealed the biggest private equity deal in Germany by agreeing to pay about €7bn for Viterra, a portfolio of 150,000 apartments owned by utility Eon.

The price, which was above the €5bn-€6bn initially forecast, makes it the biggest residential property deal in Europe and underscores the appetite of private equity investors for undervalued assets with steady cashflows. It comes amid a debate in Germany over the role of private equity firms. Several senior politicians from the ruling Social Democrats criticised them for acting like “locusts” breaking up companies and moving on.