The land that Royal Naval house stands on was once part of the western limit of the first Parade Ground of the Colony. The Street was originally called Charlotte Place, named after Charlotte Sophia the wife of King George III. In 1897 the name of the street was changed to Grosvenor, the renaming was very unpopular at the time. Earliest claimants to the site were William Davis and children of the late Robert and Anne Howe, grandchildren to George Howe - Government Printer and founder of Sydney's first newspaper, the Sydney Gazette. The construction of Royal Naval House as a substantial hostel indicates the continued presence of the British Navy in the Pacific in the late nineteenth-century and their role in protecting merchant shipping. Unlike the majority of naval facilities in Sydney Harbour it was not built on one of the harbour islands or on the foreshore.