A furious woman whose business was destroyed in a building fire in Alexandria on Wednesday morning said her landlord had started housing foreign nationals illegally in caravans and shipping containers at the back of the run-down site two months ago to "make a quick buck".

The ferocious blaze overnight has uncovered a squalid, illegal housing set-up that NSW Fire and Rescue Commissioner Greg Mullins said was shocking and outrageous.

Backpackers were discovered to be living in buses. Credit:Peter Rae

Vicki Bonneville, whose catering company occupied one of four units in the Burrows Road complex, said landlord and owner Masaaki Imaeda was renting out an old bus with no wheels and had piled two caravans on top of each other to house at least 15 Korean and Japanese nationals.

He had a portaloo in a car wash area and washing machines and other appliances scattered around the complex.