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The chic Diamant Hotel offers a boutique experience in Sydney.Jason Loucas

Around the corner and a world away from Kings Cross – Sydney's notorious red light district – lies Potts Point: a leafy haven for the café set, architecture buffs and well-heeled Sydneysiders.

But you've got to walk past the giant Coca-Cola sign and the tattoo parlours, a legal injection site and the brothels (legal, as long as they don't serve alcohol) of Kings Cross to get to the trendy restaurants, elegant shops and art deco wonders of Potts Point. Home to the young and upwardly mobile, there's also a naval base and a strip of backpacker hostels (you'll see camper vans for sale on Victoria Street, as returning travellers try to unload them to people heading out). Potts Point also has a significant gay population.

There's no formal boundary between the two neighbourhoods – Kings Cross is not an official district – although the El Alamein Fountain generally serves as the great divide. In this part of Sydney, establishments choose the address that suits them. "If you want to be viewed more trendily, you put Potts Point on your address," says Colin Hyde, a guide with Bounce Walking Tours who lives in the neighbourhood.

He points to the local Holiday Inn: It physically houses an entrance to the Kings Cross railway station, but calls itself the Holiday Inn Potts Point. Establishments such as Porky's Nite Spot and the Bada Bing, however, proudly bear the Kings Cross name.

Once you're firmly in the Point, though, the atmosphere shifts from booty to boutique, with lovely, independently owned shops and restaurants and imposing art deco buildings. It all makes for an entirely different sort of urban experience.

Porn again

Nothing personifies this neighbourhood in transition better than LL Wine & Dine. Once an adult bookshop that secretly served as a brothel and gambling den, it's now a trendy bar, with an extensive cocktail list and yummy Asian tapas. The wait staff are terrific, and love touring customers through the place. The hallway off the main bar area is wallpapered with vintage porn, discovered stuffed inside 35 garbage bags during renovations. Behind that lies what used to be the sex sling room, now an intimate, cushion-filled (and harness-free) lounge. Remarkably, there is no Singapore Sling on the menu. (There is, however, an LL Cool Sling and something called The Swinger; we recommend the ginger & lychee martini, though.) 42 Llankelly Place, llwineanddine.com.au

Fuel up

You won't find drip coffee in these parts. And after a stop at one of these local cafés, you won't miss it. The frothy concoctions are enough to make you swear off the stuff you drink back at home forever. Toby's Estate (81 Macleay St.) is bustling and efficient, but its organic, fair trade coffee is served at hundreds of places around Australia. At Zinc (77 Macleay St.), a sleek indoor/outdoor café, Potts Point's beautiful people sip lattes (or hazelnut hot chocolate) and read the morning papers – or choose from a good selection of magazines.

Check (it) out

Forget everything you think you know about grocery-store dining. Café Sopra at Fratelli Fresh is anything but down-market. An ever-changing menu, displayed on a gigantic blackboard, offers a wide variety of lunch and dinner options, created with local produce, meat and seafood. Try the heirloom tomatoes with buffalo mozzarella, and the prawn salad with avocado (if offered). For dessert, the Banoffee Pie (a banana/toffee extravaganza in your mouth) is a must. On the way out, grab some organic produce, and carry it away in a burlap Fratelli Fresh bag – at $5, a great souvenir. 81 Macleay St., fratellifresh.com.au

A neighbourhood gone to the dogs

"There are more dogs than children in this neighbourhood," the woman behind the counter at Paws Point Pet Deli & Boutique proudly announces when asked about the shop. Here, dog (and, to a lesser extent, cat) owners will find doggie wardrobe staples such as bathing suits, frilly dresses and pleather jackets; camouflage and pirate-themed leashes; and a full range of toiletries such as organic relaxing aromatherapy detangling spray with ylang ylang, bergamot and clary sage (yes, for the dog). These souvenirs don't come cheap, but are you really going to skimp when it comes to man's best friend? 50 Macleay St., pawspoint.com.au

Not Aus-tentatious

If you're hoping to pick up more than a Sydney snow globe for the folks back home, stop by Macleay on Manning (85 Macleay St., macleayonmanning.com) for local handmade pottery, koala stuffies for the kids and Sydney Opera House and Harbour Bridge lamps that flat-pack and cost $100 with part of the proceeds going to the Opera House. Find Australian art, including aboriginal, housewares such as work-of-art cushions and bottle openers, and an extensive vintage jewellery collection at Becker Minty (7/81 Macleay St., beckerminty.com). And if you'd like to write home ever so elegantly, head into Elizabeth Rosa Fine Stationery (87A Macleay St., elizabethrosa.com), a colourful haven for those who still like to put pen to paper occasionally. Look for the Leather & Roses journals, handmade in Australia.

WHERE TO STAY

The chic Diamant Hotel offers a boutique experience, with the comforts of one of the bigger chains. If you can, splurge on a courtyard room, where you can take the air on your large, private deck. From $160 AUD. 14 Kings Cross Road; 61-2-9295-8888; diamant.com.au

Just around the corner is the Kirketon Hotel, a member of the same 8Hotels group. Much smaller, it has no elevators but boasts one of the neighbourhood's funkiest bars, Eau de Vie. From $150 AUD. 229 Darlinghurst Road; 61-2-9332-2011; kirketon.com.au

The nicely furnished efficiency suites at Quest Potts Point feel like home, and offer a taste of Potts Point living (and freedom from the neighbourhood café breakfasts, which can easily run you $20 a person). The rooftop terrace has lounge beds – and stunning views. From $165 AUD. 15 Springfield Avenue; 61-3-9645-8357, questapartments.com.au



(Editor's note: The online version of the story removed a reference to Yellow Bistro as it has closed.)

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