Southern Africa, and specifically its western parts is dominated by low rainfall areas, and it is expected that the rainfall in most of these parts will in future decrease further due to climate change. Woodlots of fast-growing, non-invasive tree species can provide the opportunity to produce wood and release the pressure on natural woodlands, while creating much needed income to inhabitants. Over the last two decades several trials of Eucalyptus species that could potentially withstand arid conditions were established on the South African west coast. The three most promising genotypes according to their volume growth were selected among 46 pure and hybrid species from two 20-year-old trials for further evaluation. These included 10 Eucalyptus grandis × Eucalyptus camaldulensis hybrid trees, 9 Eucalyptus gomphocephala trees, and 9 Eucalyptus cladocalyx trees for a total of 28 trees. The objective of the study reported here was to investigate the within-tree and between species variability of selected physical and processing properties determining the suitability of these three species for lumber production. The density, microfibril angle, spiral grain angle, MOE, MOR, radial and tangential shrinkage, twist, bow, splitting, and collapse were measured in a radial and longitudinal gradient. Valuable insights were gained which could provide decision support for planting, processing and further research on these species when grown in arid conditions. The E. grandis × camaldulensis hybrid was inferior in terms of most relevant properties to the other two species evaluated. The main shortcoming of both E. gomphocephala and E. cladocalyx was the high levels of twist in lumber.