Mitsubishi Corp., Asia’s largest trading company by market value, is expanding into property development in Southeast Asia as the slowdown in China shrinks profits from its commodity businesses.

The first project, starting next year, entails building an apartment complex with more than 1,000 units in the Philippines at a cost of 40 billion yen ($405 million), Masahiro Nagaoka, head of township development and construction at Mitsubishi, said in an interview in Tokyo.

The trader has allied with local Ayala Land Corp. for the project and is looking for similar opportunities in Vietnam, Indonesia and Myanmar.

“We see in those countries large populations, a pent-up demand for housing, and a chance to enter markets that aren’t yet crowded,” Nagaoka said. “We will look for local partners in each country.”

The Tokyo-based trader is expanding outside of raw materials businesses as Chinese demand for resources declines. Mitsubishi in alliance with BHP Billiton Ltd. is the world’s top exporter of coking coal used to make steel. It said in May it aims to double earnings from non-commodities by 2020 from 180 billion yen ($1.82 billion) last year.

Real estate falls under Mitsubishi’s industrial finance and logistics division, which almost doubled net income to 25 billion yen in the fiscal year ended March 31. That came as total profit dropped 20 percent on strikes at its Australian coal mines and lower oil and metals prices.

Since broadening real estate and property development to the U.S. and then China two years ago, the company sees Southeast Asia as its next growth market, Nagaoka said. (Bloomberg)