Plans have been unveiled for the mixed-use redevelopment of Paddington’s iconic arthouse cinema Verona - continuing the revitalisation of Oxford Street with exciting new retail and rooftop dining, and the addition of new boutique commercial office space to the strip.

It represents the first ever large-scale commercial office offering in Paddington, delivering over 3,500 square metres of state-of-the-art workspaces and retail, set to capitalise on the surge of demand for premium office space on the city fringe.

Prominently located at 17 Oxford Street, the 1,138 square metre corner site was snapped up by private development companies WT Malouf and Fenbury in 2021 from previous owner Robert Bleakley, founder of Sotheby’s Australia Fine Art. It has housed the Palace Cinema since 1996.

Named ‘Verona’ in a nod to the building’s cinematic heritage, the project will see the landmark building redeveloped into a world-class eight-level mixed use building featuring 3,500 square metres of office and retail space and 1,000 metres of cultural entertainment space.

Aligned with City of Sydney’s vision to revitalise the creative and cultural precinct underpinned by commercial property, Verona sits within a redeveloped strip at the gateway to Paddington.

It is adjacent to the 25 Hours Hotel being developed by Central Element and Boston Global, set to open in December, 2024 and deliver a new 109-room hotel with retail and wellness facilities. Oxford House is also nearby at 21 Oxford Street and features a 56-room hotel with a courtyard pool, poolside bar and all-day diner.

Designed by prolific architecture practice Scott Carver, Verona will feature two-levels of sub-terranean cinema spaces and cultural retail on the ground floor. Four levels of commercial office space will sit below a rooftop activated with quality food and beverage offerings and boasting views of Sydney’s Harbour and CBD.

The rooftop crowning Verona spans 620 square metres and is earmarked as a destination restaurant and bar.

According to the architects, the design pays homage to the site’s cinematic history while reimagining it as a vibrant, mixed-use cultural hub.

“This project is an amazing opportunity to reinvent and redefine the next generation of cultural experiences on Oxford Street. It anchors the eastern end of the City of Sydney’s Oxford Street renewal and will help people rediscover one of Sydney’s most creative and culturally significant areas,” said Doug Southwell, Project Architect and Co-Managing Director of Scott Carver.

“Cinema opens a world of experience and magic beyond our everyday lives. Verona will retain these cinematic experiences loved by so many, and enhance them with live entertainment, retail, and creative workspaces, allowing magical experiences into the everyday,” he said.

Importantly, the design retains the historic former industrial brick façade, paying homage to the history of the site. Above this, the new building features a crystalline and dynamic façade that wraps the workplace floors, providing both excellent daylight and amenity within, whilst creating a luminous and lightweight form above the industrial-era brickwork.

Built in 1946, Verona has a rich history and was initially operating as an industrial facility before becoming the iconic cinema that etched itself into Sydney’s creative landscape.

Palace acquired the Academy Twin cinema on Oxford Street in Sydney in 1995 and architects Tonkin Zulaikha Greer designed the purpose-built four screen Verona complex. The cinema brought Hollywood glamour to Paddington when it was famously opened in 1996 by Nicole Kidman - hosting the premiere of her movie ‘To Die For’, with the famous Australian actor arriving in a sports car with then-husband Tom Cruise.

The ground floor was also the site of the first Mambo retail store – a lifestyle brand created by Australian artist and Mental as Anything band member Reg Mombassa. Since its closure in 2006, the space has hosted pop-ups for a range of global brands including Chanel, Google, Tommy Hilfiger, and Deus Ex Machina and has also been used as a television studio for Channel 9 productions.

Verona will deliver next-generation commercial office space with floorplates ranging from 523 to 822 square metres and some floors offering expansive outdoor terraces. There is also the potential for inter-connectivity to provide contiguous space for large, multi-floor tenants.

Rental rates for Verona are undisclosed, yet expected to align with prime commercial office space in Darlinghurst and Paddington currently achieving net rates of between $1,100 - $1,500 psm.

According to exclusive leasing agents, Mercer Property and Knight Frank, early enquiry has been received from tenants across a broad range of industries given the development’s proximity to Sydney Football Stadium, Fox Studios and St Vincent’s Hospital in Darlinghurst.

“It’s a compelling opportunity, there’s simply no office space of this scale available in Paddington. It’s bringing city-style space to Paddington and the market is ready for it. We’ve already dealt with a broad mix of potential tenants across the sporting, entertainment and medical sectors given Verona’s proximity to major amenities. The tech sector is another with other fringe locations like Surry Hills and Darlinghurst at capacity,” said Tom Speakman, Founding Director of Mercer Property.

“Eastern Suburbs based CEOs are drawn to Verona’s proximity to home, reducing the commute and delivering greater work-life balance. It is an ideal opportunity for a boutique HQ,” he said.

Data from Knight Frank reveals the surge in demand for commercial space in CBD fringe locations in response to persistent hybrid working styles post-COVID, with net face rents experiencing an average growth rate of 6% over the last 18 months.

“Sustained population growth and a resilient local economy within the city fringe has seen a rise in young, highly skilled workers over recent years, compounded by the further growth of Sydney’s white-collar industries. These factors have spurred demand for well-located and amenity-rich office space, especially as hybrid working styles persist and companies look to attract more high-performing talent,”  said Nick Lau, Director and Head of Office Leasing at Knight Frank.

“Vacancy rates within the city fringe are amongst the lowest in the Greater Sydney area, with an undersupply of prime stock evidenced by sub 2% vacancy in Surry Hills, Darlinghurst, and Eveleigh. Given a limited pipeline of new developments and strong, ongoing rental growth within the city fringe, the delivery of new prime office supply will be well-received by the market,” he added.

Targeting benchmark sustainability credentials, Verona will offer tenants modern End-of-Trip facilities usually only seen in CBD office towers.