Why Kickstart stopped buying buildings and let landlords pay instead

Where Kickstart is in 2025

The episode opens with Muzamil framing a thesis. Pakistan saw a wave of coworking launches between 2016 and 2018 — Colabs, Daftarkhwan, Kickstart — and a second wave around the 2021 to 2022 boom. What is interesting, Muzamil notes, is that the original three all survived, and not just survived but are now thriving. Coworking is one of the few infrastructure-heavy categories in Pakistan where the early entrants made it through the downturn intact.

Saad Riaz picks up the numbers. Kickstart began in 2016 with forty desks in what he calls “a big scrappy space — nothing fancy.” Today the company runs over six thousand contracted desks across roughly four hundred thousand square feet of office space spread across Karachi, Lahore, and Islamabad. Right now, Saad says, the company is opening new properties simultaneously in all three cities — DHA Phase 8 and Clifton in Karachi, plus Lahore and Islamabad locations.

“It is, we can say, an established industry by this point,” Saad says. The shape of his explanation across the next ninety minutes is essentially a long answer to the question Muzamil opens with: what does the depth behind a coworking floor actually look like, and is this industry near saturation or just getting started?

The DNA was always a conventional business

Muzamil notes that in 2021 and 2022, when the two of them last spoke, the air was thick with startup-startup-startup. He asks Saad what changed for Kickstart through the economic downturn that followed.

Saad’s answer reframes the premise. Even at the height of the startup funding cycle, startups were never more than twenty to twenty-five percent of Kickstart’s desks. Today they are far less. The company, he says, was never built on the startup playbook — no characteristic pitch, no characteristic capital rounds. “Our DNA, from day one, was much closer to a conventional business than a startup.”

The non-negotiable rule that came out of that DNA: every property is a standalone cost centre. “Every property has to be EBITDA-positive in its own right, and until it is, we will not run it. We are not looking at the overall scheme. If we are running seventeen properties, we look at all seventeen individually.” This is the single most important sentence Saad says in the first half of the conversation. It is the reason Kickstart’s decentralised risk model works, and it is the reason the company is still here.

From property-based investment to landlord partnerships

In 2022, Muzamil remembers, Kickstart was at a business-model inflection point. Saad explains what that meant.

The original model was property-based investment. Kickstart would identify a building — Saad uses the example of a twenty-thousand-square-foot grey structure on Shahrah-e-Faisal — model a P&L, and go to investors with a hundred-million-rupee capex ask. In return, investors got a share of that specific property’s bottom line in perpetuity. It was a dividend play, property by property.

The pivot happened in 2021. Inside the COVID shock, Kickstart concluded that the long-term health of the business depended on aligning with landlords rather than competing with them for capital. The first landlord partnership property opened in Karachi that year — in fact, the very building Saad is sitting in during the recording. Every property opened since has been on the landlord partnership model.

The mechanics are clean. The landlord puts up the hundred-million capex. Kickstart no longer brings investor capital to the table. “We have become an enabler. We are enabling the landlord to generate a better yield from his investment.” The capex risk shifts off Kickstart’s balance sheet entirely. The brand, the operational structure, and the customer pipeline are what Kickstart contributes.

Why a landlord says yes

Muzamil pushes on the question every property owner in Pakistan would ask: what is actually in this for the landlord? The answer is a short, careful piece of arithmetic worth slowing down for.

Take a one-billion-rupee asset — Saad uses a Lahore, Gulberg, or Shahrah-e-Faisal example, where one billion buys roughly twenty-five to thirty thousand square feet of office space. Rented out as grey shell space at the prevailing market, the landlord earns about five percent annually. Fifty million in rent. A twenty-year payback.

Now layer Kickstart on top. The marginal capex to convert that shell to a fully furnished, fully serviced floor is around one hundred and fifty million — roughly a fifteen percent investment bump on the original billion. In return, the yield on the combined 1.15 billion moves to between seven-and-a-half and eight-and-a-half percent. The annual return moves from five crore to seventy-five or eighty-five million. “That fifteen percent marginal investment increases your return by fifty to seventy percent,” Saad says. “The five-percent number, which used to be a twenty-year payback, becomes an eight-percent number — a twelve-year payback.”

The two of them then walk through which landlords pick which structure. Risk-averse landlords get a fixed yield, slightly lower — Kickstart absorbs the operating volatility. Higher-appetite landlords take a variable share that can hit nine or even ten percent in a good year, with Kickstart stepping aside on a small percentage of revenue. The willingness to operate both shapes is what makes the partnership story land in pitches.

The customer everyone assumes versus the customer who actually pays

Muzamil then asks Saad to break down demand. The conventional wisdom is that coworking is for startups and freelancers. Saad is direct: those are the two smallest segments at Kickstart. They always have been.

“Startups and freelancers — ironically, these are our two smallest segments,” Saad says. The base of the business has always been IT back offices and service export companies — Pakistani teams set up as wage-arbitrage outposts for foreign firms. “If these people were not there, our survival in the first four or five years would not have been possible. These were our best customers in that entire period.”

The biggest growth segment over the last two years, though, is something else: corporates. Saad lists the names — EY, Mashreq Bank, Unilever, GSK. The path of entry was usually a satellite office or a stop-gap. A multinational would land a four-month overflow team in a Kickstart floor while their main lease was being built out, realise the operator could meet their compliance and IT-isolation requirements, and then come back with a hundred-and-fifty-person demand. Mashreq Bank, for example, runs on a fully isolated network at Kickstart — its traffic does not touch the shared infrastructure. Each major corporate customer gets its own segregated IT setup. That is what made the corporate land grab possible.

Startups, Saad explains, were never an unattractive customer in principle. They were an unreliable one. “Their desk demand fluctuates very fast — fifty today, a hundred and fifty tomorrow, then twenty the day after. The other two segments give you far more stability.”

Where coworking ends and managed offices begin

Muzamil makes a structural observation: above fifty people, a company is no longer really doing coworking. It needs dedicated meeting rooms, privacy, often compliance. He suggests this is a different business altogether.

Saad agrees but pushes the threshold lower. Even ten people, he says, need privacy. They have their own sub-culture, their own data, their own communications. Working in an open shared room is not optimum for them. Kickstart has always been, in his framing, “more of a flexible office than a coworking space” — fully furnished, fully serviced, flexible-term, but with the option to be private.

Above thirty seats, customisation becomes mandatory. Saad points up at the ceiling of the building he is recording from: above him is a floor purpose-built for Careem — about one hundred and twenty-five seats, co-branded reception, eight to ten Careem-only meeting rooms, a small daycare, a dining area, all designed around Careem’s specific layout requirements. Kickstart is currently building similar bespoke buildings for IG Insurance and Hugo Bank in Karachi. Each goes through a months-long requirement-gathering process before the customer signs and moves in. Zero capex to the corporate. A walk-through of an existing running building to verify Kickstart’s furnishing standard, and then a custom floor delivered to spec.

This is the second product Kickstart sells, parallel to the small-business coworking floors. It is the same management capability deployed at higher contract values and longer terms.

EBITDA, the landlord’s slice, and where the money goes

Muzamil asks the question most operators dance around: what does the unit economics actually look like?

Saad says industry EBITDA sits at twenty-five to thirty percent — but only on the fixed-rent landlord model. On the variable model, the landlord can take up to fifty percent of total revenue. That is not as bad as it sounds: roughly thirty to thirty-five percent of that is rent the landlord would have earned anyway on a vanilla lease, and the remaining fifteen to twenty percent is the premium they earn for taking on the capex and operating risk.

Muzamil then asks the dumb-on-purpose question — where does the company’s cash go? Saad uses it as a way into a future-tense answer. The company is moving, gradually, toward partial ownership of the office real estate it operates. The decentralised landlord-partnership model will continue, but reinvesting profit into owned units increases control over the spaces Kickstart already runs, and grows the asset base of the business itself. It is, in Muzamil’s framing, the move from being a pure operator to having a balance sheet that compounds.

On risk, Saad’s answer is consistent with the day-one rule. Every building is a separate partnership, in a separate location, with separate local dynamics. “Our product, at the end of the day, is real estate. There is always demand for space.” A downturn compresses yields temporarily; it does not threaten the resilience of the structure because there is no over-leveraged central balance sheet to threaten.

Small cities, and the only place Kickstart would consider a franchise

Muzamil brings up the IT-services workforce in tier-two cities — Faisalabad, Multan, Sialkot, Gujrat, Gujranwala. He sketches the urbanisation argument: the Gujrat–Sialkot–Gujranwala triangle has effectively merged at its edges. Combined, those metros now hold populations comparable to a major metropolis. Elite schools, suburban housing, apartment buildings, urban lifestyle markers — they are all arriving. IT-enabled workers do not need to be in Karachi or Lahore. The constraint that holds them in the big cities is lifestyle, and lifestyle in the small cities is changing.

Saad agrees with the direction but is careful about the operating model. In the three main cities, Kickstart will not franchise — it never has and he does not think it ever will. The operational structure the company builds in each metro is what produces the cost efficiency; the more space in one city, the more leverage on that structure. But in tier-two cities, where Kickstart would not deploy the same on-the-ground operational density, he sees room for a partnership model with a heavier landlord role — Kickstart provides the playbook and perhaps a single community manager, the landlord runs more of the day-to-day. It is the only place in the conversation where Saad opens the door to a model that resembles franchising.

Retaining people in a country with no IPO market

The conversation widens here. Muzamil names a structural problem every Pakistani employer hits: how do you retain a talented employee in a country where stock options have nowhere to convert? In a market with no functioning IPO infrastructure, ESOPs are funny numbers on a page. Some founders have improvised — buying land outside the city, building apartments, giving them to employees as long-tenure rewards. Muzamil asks Saad how Kickstart thinks about this.

Saad’s answer reframes the question. People are not stupid. A young worker in their twenties or early thirties is weighing three things at any workplace: how much the job is teaching them and growing them as a person, whether there is a path to building wealth or some passive income source over five to ten years, and what the day-to-day culture and respect look like. “If the employer made effort on the training and the work but missed those other boxes, that is why the employee left. They went to the next best option.” Retention, in his framing, is about closing those gaps, not about replicating a Silicon Valley equity structure that does not have a functioning exit market underneath it.

Why co-living is harder than it looks in Pakistan

Muzamil walks Saad into adjacent markets. He uses Dubai as a parallel — short-term holiday-home managers running effectively the same model Kickstart runs, but on residential apartments. WeWork tried it with WeLive. Adam Neumann’s new venture, Flow, is doing it in residential at scale. Could Kickstart do it here?

Saad has thought about this for five or six years. The honest assessment is that Pakistan’s living market is not the same as its office market. Office space has a generally accepted standard — most companies want roughly the same thing. Living does not. A young IT graduate, a single working woman, a family, a labourer-class hostel resident — each has a different cultural and social expectation of who they will live next to and what the building rules look like. Many apartment buildings in Pakistan explicitly refuse to take youngsters. Reconciling those segments under one operator is a different problem from running an office floor.

Muzamil pushes on a narrower wedge: corporate-paid worker housing. He describes a friend who joined a tech startup as one of the founding HR hires; over the last eighteen months they hired around two hundred and fifty employees and bundled accommodation into the package. The company became the decision-maker for residential real estate. Saad takes the bait — this, he agrees, is the most interesting and most aligned sub-segment in living. Corporates and government organisations have done versions of it for decades. The new tech-company variant is the one with operator opportunity. In Karachi, where workforce density is high and internal migration concentrates in specific areas, the market is already there. In Lahore it is developing but, in Saad’s view, premature on price points.

Daycare, female participation, and the economics that actually unlocks it

Toward the end of the conversation, Muzamil asks about the gender mix of Kickstart’s desks. Saad estimates thirty to seventy, based on observation rather than recent data. Muzamil pushes — this matters, he wants more of it.

Saad acknowledges it openly. Early Kickstart did not prioritise this. The focus is moving now. New branches are being designed with it in mind. He cites member companies that have publicly committed to fifty-fifty employment ratios and are working toward them with what he calls honesty and sincerity.

Muzamil then offers an operational angle that Saad takes seriously. The single biggest barrier for high-quality women workers, in his experience — drawn from his mother-in-law, who has run corporate daycares for Telenor and Ufone — is childcare proximity. A ten-person company with two mothers cannot afford to run its own daycare. But ten ten-person companies in one Kickstart building, each with two mothers, can afford to share a twenty-child facility. The aggregation is exactly what coworking already does for furniture, IT, and reception. It is the same economic argument, applied to childcare. “Solving that one practical problem may take a thirty-percent ratio to fifty,” Muzamil says. Saad agrees: solve daycare, commute, and workplace environment, and the participation rate moves significantly. It is, he says, something Kickstart needs to do more work on.

A cautious optimist, three years later

The conversation closes at the ninety-six-minute mark. Saad reflects on the difference between the version of himself Muzamil spoke to three years ago and the version sitting in front of him today. Three years ago he was more openly bullish — the country was younger to him, the environment felt different. Today the framing is more measured.

He still sees the upside. A three-to-four-hundred-billion-dollar economy growing consistently at five to six percent could be a two-trillion-dollar economy. The geopolitical leverage is real. The emerging middle class, the educated workforce, the service-export entrepreneurs participating in the global economy — those are all positives. But Saad is also more aware of the time bombs now. Floods displacing millions. Climate disasters arriving unannounced. A population bulge that is not being educated quickly enough. A rising count of out-of-school children.

Extrapolating from the last seventy-five years to the next twenty-five, his fear is that Pakistan stays stuck in a messy middle — neither a South Korea-style breakout nor a complete collapse. “Just existing.” Muzamil offers him the label and Saad accepts it: “Cautious optimist — I think that is the right corporate term for me. But I really hope that our direction is right.”

It is the right note to end a conversation about an operator who built one of the country’s largest physical-infrastructure businesses by refusing to let any single property carry the rest. The discipline that runs through the Kickstart story — every building stands on its own, the landlord’s capital is the right capital, the customer who actually pays is not the one the headlines talk about — is the same discipline Saad now applies to the country he is operating in.