Case Study: Greater Sydney Depot RationalisationStrategy

Client: Sydney Water

Location: Sydney Metropolitan Area New South Wales

Background

Sydney Water operated multiple depots across the Greater Sydney area, many of which were

ageing, under-utilised, or operationally inefficient. Advice was required to support a strategic

review of depot assets in three key sub-regions—Northern, North Western, and South Eastern

Sydney—with the goal of streamlining operations, optimising land use, and delivering long-

term cost efficiencies through consolidation.

Across the Sydney Metropolitan region, a total of 10 depot sites were included in the review

which involved a range of redevelopment, relocation, and reuse options. The analysis was

underpinned by 10-year discounted cash flow modelling and asset reversionary valuations.

Project Summary by Region

1. Northern Sydney (Warriewood, Beacon Hill, Pymble)

Options:

o Continue operating three sites “as is” (Do Nothing)

o Consolidate to one site with new construction

o Consolidate to one site with reuse and refurbishment

 Preferred Option: Consolidate to one site and Reuse and refurbishment

 Rationale:

o Most cost-effective use of capital

o Leverages existing infrastructure with targeted upgrades

o Unlocks land value at the other two sites

2. North West Sydney (St Marys Depot)

Options:

o Continue current operations without major investment

o New build on existing St Marys site

o Reuse and refurbish existing St Marys structures

 Preferred Option: Reuse existing depot with major refurbishment

 Rationale:

o Balances capital cost and asset value retention

o Delivers substantial upgrade while avoiding full rebuild costs

o Improves residual asset value by 288%

3. South Eastern Sydney (Daceyville, Malabar, Matraville, Alexandria)

Options:

o Do Nothing

o Consolidate to one site (new build or reuse)

o Consolidate to one site (reuse of vacant facilities)

 Preferred Option: Reuse and consolidate to one site

 Rationale:

o Yields the highest NPV

o Capitalises on site value uplift and future reuse

o Supports workforce consolidation and sale of surplus assets

Strategic Insights

 Consolidation with refurbishment consistently outperformed full-scale redevelopment

in terms of financial return and risk-adjusted benefit.

 Redevelopment of underutilised land created immediate capital release opportunities.

 Reuse options allowed for improved facilities with modest investment, preserving

capital for higher-priority network infrastructure.

 Common risks included temporary disruption during works and assumptions

regarding zoning, remediation, and market values, all addressed through sensitivity

analysis.

Recommendations

1. Prioritise Reuse-Based Consolidations in all regions to maximise return on

investment.

2. Proceed with Asset Sales of surplus properties where feasible and reinvest proceeds

into strategic upgrades.

3. Establish a Centralised Depot Delivery Program to coordinate implementation phases,

manage stakeholder impacts, and monitor capital expenditure.