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Award-winning Chippendale restaurant Ester has been quietly plotting a spin-off venture in Surry Hills. The Chippo team has been exploring the opening of a restaurant in the achingly cool boutique hotel being built next door to the Paramount Pictures building.

The hotel is the brainchild of Russell Beard, from Reuben Hills, Melbourne coffee entrepreneur Mark Dundon and property investor Ping Jin Ling. But just hours after word a deal had progressed and only DA approval stood in its way, Beard was keen to hose down the story.

"Looks like Ester have pulled out after having a look at it quite seriously … we may look at taking the space ourselves," he told Good Food. Given the pedigree of the trio that wouldn't be a bad result, but there's still plenty of water to pass under the bridge on this deal. The tiny strip of Commonwealth Street is set to be one of Sydney's most talked about, with Melbourne's Chin Chin also opening there next year.