Abstract

Trade is a big part of Sweden's economy, which creates job opportunities and generates a very large part of the state's tax revenue. Since e-commerce has advanced due to the digitalisation, trading has evolved, and the physical stores have decreased. Therefore, the purpose of the study is to investigate how commercial property owners adapt their strategies in order to cope with the changes that the evolving e-commerce have brought on the demands of physical retail stores. The study is qualitative and is divided into two primary parts: a theoretical part and an empirical part. The theoretical part consists of previous research on the subject and the empirical part consists of semi-structured interviews. The choice of a qualitative method is aimed at creating a deeper understanding of how real estate companies should adapt their strategies and undertake the challenges brought by the rapid growth of e-commerce.  The study draws several conclusions. Property owners have faced new challenges with the growth of e-commerce. This has led to new challenges, such as increasing vacancies and lower sales from stores, which affects the rents. In addition, the property owners’ position towards the tenants has changed via the bargaining powers of the tenants. As a consequence of the change in demand for the store premises, property owners have also had to adapt their strategies. The authors conclude that the property owners have applied a type of differentiation strategy by adapting their properties to what the customers value highly. It is also stated that the property owners have moved towards a more diversified property portfolio where they have reduced the number of retail units and made room for other businesses. Lastly, the authors emphasize that real estate companies should collaborate with other real estate companies and public actors, in order to create an attractive, safe and eventful city center and thereby increase the number of people who contribute to the trade. Keywords: Commercial Property Owners, Strategy, Digitalisation, E-Commerce and Covid-19.