Illegal warehouse parties have proliferated since the state's liquor laws were changed, according to club owners and music promoters, who say the partygoers are trying to escape 1.30am lockouts and 3am last drinks in the CBD and Kings Cross.

The underground raves are not licensed and are known for unregulated drinking, drug use and potential fire hazards in unsafe buildings. Popular sites include disused warehouses or studios in the inner-city industrial belt between Marrickville and Alexandria, but also old army barracks in areas including Mosman.



Lockouts push parties elsewhere: Sydney's tough lockout system has seen an increase in the rate of warehouse parties. Credit:Steve Lunam

Murat Kilic, owner of the Spice Cellar nightclub at Martin Place, said there had been an "uprising" in secret dance events not seen since their heyday in the late 1980s. He said he had lost much of his business to the Star casino and warehouse parties, some of which were attracting up to 1000 guests.

"It's definitely a renaissance," he said.