The land now occupied by Dylans was first developed by John McKail, a merchant and Consul to the German Empire, who operated as a general merchant in a large warehouse and woolstore on the site. Following his death in 1871, his family, trading as John McKail & Co, built the two storey building Dylans is currently housed in. It was completed in 1880.

 In 1902 it was operating as the Central Coffee Palace, with HT Offers Engineering at the rear, when the building was completely gutted by fire. Only the facade and side walls remained. It was rebuilt by 1903 and continued to have many identities including The Pioneer Hairdresser and Tobacconist, the Crystal Cafe, King's Albany Hostel, Rose Albany Hostel & Tea Rooms and finally home to the Albany Light Opera Company in the late 1960’s before the building became empty and derelict.

Tom the Cheap (Grocer) purchased the property in 1968 along with many others along the Terrace with plans to demolish and build a shopping and leisure complex. Fortunately this never came to fruition.

Gwen and Morris Blake acquired the building in 1980, restoring it to a leasable condition and Sophie's Bookshop operated out of it for four years. The conversion to Dylans on the Terrace was completed in September 1987.