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Wealthy pastoralist and company director Leslie Sprague built Dungowan Flats in 1919 naming them after his country property Dungowan Station, 33 kilometres east of Tamworth. The Flats offered their privileged tenants a home with ‘every modern convenience’ (fully supplied with electricity, telephones and an ‘electric elevator’.
A commercial kitchen on the ground floor serviced the Restaurant De Luxe above. In 1925 the company Dungowan Ltd converted the Paramount Picture Theatre next door into the Cabaret Dungowan where grand social occasions were celebrated. An ice skating rink was added at the end of the 1920s, creating a complex of buildings extending to the corner of Ashburner Street and South Steyne.