Something beautiful and exciting is happening in Victoria. No, I'm not talking about the refurbishment of the Victoria Palace in readiness for Hamilton. I'm referring to the haunting, strange, exquisite Whisper House, the second production at The Other Palace.

Ghost tale, love story and thoroughly intoxicating treat, Duncan Sheik (Spring Awakening, American Psycho), Kyle Jarrow and Keith Powell's chamber musical started life as an album before a theatrical version in San Diego in 2010. Adam Lenson's atmospheric UK premiere justifies the creative team's ongoing faith in this unconventional piece. Tragically, one of the central themes of foreigners being unwelcome on American soil while the tensions of war simmer (the setting is a coastal lighthouse during World War II) is more relevant now than it was at the time of the first staging.

Elsewhere this is a tale of family guilt, child manipulation and the restless souls of lovers lost at sea, and while the first half is stronger on mood and characterisation than plot development, the story kicks in satisfyingly for act two. Fans of Sheik's Spring Awakening will find much to treasure here in Whisper House's similarly eclectic mix of period setting with a bombastically melodic rock score. The inventive orchestrations of Jason Hart and Simon Hale - combining a rock band with wind and brass to frequently enthralling effect - ensure that this doesn't sound like any other musical currently playing. It helps that all of the singing is magnificent. If the lyrics are nothing special, Jarrow's script is often bleakly funny and ultimately deeply touching.

Visually the production is a knockout, with Andrew Riley's circular set ingeniously evoking the lighthouse, numerous external locales and the seashore itself. Alex Drofiak's lighting is gorgeous although sometimes so dim that it is hard to make out Richard Pinner's clever magic tricks.

As the omnipresent ghosts Simon Bailey and Niamh Perry are mainly required to wander about alternating between menace and playfulness while singing their hearts out, but they do so compellingly; they also get to really rock out in the entirely superfluous, but hugely enjoyable post curtain call number. Simon Lipkin reins in his innate likability to deliver a performance of chilling power and desperation as the local sheriff with an axe to grind.

Stanley Jarvis - performing on press night but alternating with Fisher Costello-Rose - is superb as the child delivered, Mary Lennox-like, into the care of his strange and estranged lighthouse keeper aunt following the death of one parent and the incarceration of the other. Delivering the acting performance of the night as said aunt, Dianne Pilkington is a revelation, her defensive, damaged Miss Lily possessing an abrasive nobility and tough sweetness that is as moving as it is true. As her Japanese colleague - whose illegal presence accelerates the story - Nicholas Goh has an impressive warmth and stillness.

This captivating, grimly rollicking house is well worth a visit. It deserves to be a great big hit.

Whisper House runs at The Other Palace until 27 May.