HARDWARE retailer Lumber Depot Limited is weighing rental opportunities among several possible uses for its newly acquired 17 Gordon Town Road property in Papine, a parcel that lies directly beside its flagship location.

Speaking with the Jamaica Observer this week following the company’s annual general meeting, Managing Director Major (Ret’d) Noel Dawes said management has adopted a strategic and phased approach in assessesing how best to utilise the just-under-half-acre space.

The property, purchased for a little over $200 million and financed through a mix of internal resources and loan funding, now houses several buildings previously used for small commercial operations, which Lumber is considering whether to demolish or develop.

“If, after carving out what we need for our business, there’s space left, we can look at outsourcing part of it. It may be offering it to a bank for an ATM but it’s too early to speak on the specifics,” Dawes told Business Week, noting that discussions remain preliminary as the company’s directors in the interim continue to examine how the space can be developed and its usage maximised.

“We’re not closing our eyes to any opportunity — we could even decide that we’re going to put a complex there — but we first have to wait for the experts to tell us what is best suited for the space,” he said.

While rental remains a possibility, Dawes stressed that the first order of business is determining how much of the land is needed for Lumber Depot’s own expansion, particularly for parking and additional storage, both of which he described as “musts”.

He further noted that no definitive decisions will be made until engineering and structural assessments are completed. “We now have full access to the property so we’ll bring in the professionals to guide us,” he said. “We may have ideas, but structurally they may not be feasible. Once we understand the constraints and possibilities we’ll know how best to redevelop it.”

The acquisition, which reconnects the company with its existing premises that sits on 17C, now forms part of the original subdivided property. JN Bank continues to rent a section of that site, demonstrating that rental has long been incorporated into Lumber Depot’s operating model.

With the Gordon Town Road purchase now finalised, Dawes said the focus is on maximising the value of the new property before pursuing additional acquisitions, though the company remains open to future opportunities.

“We have been taking a strategic look at how to develop what we now have but we’re not closing our eyes to other possibilities. But for now, the priority is clear — assess, redesign and redevelop the new Papine space in a way that enhances our operations and, if feasible, generates new streams of income,” he said.

Pleased with the company’s current growth trajectory — having last year acquired a portion of Atlantic Hardware and Plumbing Company Limited — Dawes said Lumber Depot, after securing $1.5 billion in revenue during its last financial year, remains focused on increasing sales in the year ahead.

Dawes said the company, now preparing for shifts in Jamaica’s construction landscape, is also currently working to diversify product offerings as it positions to supply the rising demand for new items such as drywall systems, sheet rock and other materials widely used in modern building methods — particularly when doing high-rise construction and residential partitioning.

“The industry is evolving, and these products help to bring down construction costs and customers are asking for them,” he said. “Lumber Depot already stocks some of these items but intends to expand both quantities and the range of brands to cater to different market segments.

“We want to ensure our customers can choose according to their budget,” Dawes added as he also noted strong demand for products from new customers in western Jamaica, many of whom were severely affected by Hurricane Melissa.

He said that although this demand from the west is not likely to drive long term revenues, it will positively impact earnings in the short term while strengthening brand visibility.

“The name Lumber Depot will continue to be developed, having been able to provide for different parishes and helping us to become a point of reference going forward,” Dawes said while noting that the company’s immediate priority is to maintain adequate inventory to support rebuilding efforts.

“We want to ensure that we can help people get their lives back on track,” he added.

Meeting in progress. Shareholders and other attendees converge at the Courtleigh Hotel Conference Room for Lumber Depot’s recent AGM.