Within weeks Studio Melt + High Tea With Mrs Woo and Mr Sister Coffee will move into sites flanking the laneway leading from Wolfe Street to the square known as Lyrique Lane, dwarfed by Iris Capital's residential apartments Fabric House, Washington House and Perkins and King.

Others in the new retail collective are boutique stationer Honest Paper, which relocated from The Junction and is trading; Artisanal Cellars, an up-market bottle shop by King Street Deli & Bar and Habesha restaurant owners Darrell and Lidya Stapleton; and Oh My Papa, the new offering from Humble Thai. The latter two are slated to open in June.

Garth Buchanan, who began Mr Sister Coffee six years ago with sisters Bec and Ally and has previously run city cafes, said the city site would not be a cafe, rather a "coffee bar", with a speciality coffee menu and retail brewing equipment.

"Typically when you go to a cafe there are one or two kinds of coffee, we'll have 20 different kinds - we are sourcing a lot more for this project; half will be roasted to be brewed, the other half for filter, and the list will be extensive," he said. "We might have seven or eight espressos on at once, same for filter."

Coffee will be supplied by Melbourne roastery Coffee Supreme, Australian companies and "guest coffees" from the US and Norway.

Despite its specialist focus, Mr Buchanan said the new site would cater for everyone: "If you want that experience of paying for an expensive coffee and we'll tell you about how it's processed at the farm and why it tastes like blueberries, that's fine, but if you want to come in and just smash a cap, that's fine. We love caps."

The origins of the collective go back about two years, when Mr Sister was weighing up whether to renew its lease at Westfield Kotara and began talking to Studio Melt, run for close to a decade by Angela Hailey in the Hunter Street mall.

Mr Sister left Westfield and opened a new location at Speers Point but continued discussions with Studio Melt and siblings Rowena, Angela and Jules Foong of High Tea With Mrs Woo, which had vacated its leased Cooks Hill store after almost 20 years to partner with Studio Melt.

Bec Buchanan said each business was exploring options in the the transforming city.

"We felt like going in together: like-minded businesses with probably a shared customer to create a stronger drawcard for people to make that effort while there is still so much going in in town," she said.

"For us it's extremely positive and there is so much energy coming from so many different areas - state government, private investors. It feels like it's on the cusp of change being seen and there's been a lot of grief, so to speak, for businesses and traders to get to this point. It's feels like slowly it's coming out the other end."

High Tea With Mrs Woo is known for its small-scale, environmentally conscious business model and Angela Foong said great consideration was given to sign on for the city site.

"We went back and forth, it was very much a difficult decision, they are a big developer taking over the entire strip and we wanted to see what level of quality they would achieve. We're really pleased to say they have been great to work with. They are still a developer but there's a respect to the heritage of the city," she said of the Iris footprint.

"We can't stop the developments happening so we need to curate it and they only way we can do that is coming up with a plan and taking action. What happens if it was filled with ordinary chain shops and that would make the CBD not the place our community feels represents it?

"It's all a risk but at least we doing it together."

Angela Hailey said Studio Melt felt "very much a part of the community" after trading in the CBD at length and wanted to remain in it.

"We considered many sites but often they were in older style buildings like our current locations, whose owners would only offer shorter term leases to keep their options open to redevelop their properties," she said.

She said the new space with multiple tenancies would allow businesses to be independent "but part of a location with an identity that we can as a collective promote as a destination."

The new Studio Melt + High Tea store will have two entrances to a "co-store concept" for both businesses: "We'll consider the store like a publication - creating exhibits that are exciting for the local customer to discover regularly, story-telling products and the people behind all this beautiful work in exquisite detail."

Angela Foong said being in a collective would bring benefits.

"It had to be established businesses who could take the plunge going into a higher prices in a commercial lease. We wanted to be able to negotiate as a collective, we have more power as a collective than as individual businesses," she said.

Mr Stapleton said that the inner-city was thirsty for a good bottle shop.

"The offerings are scattered from standalone bottlo or on-premise licene like a pub with a bottlo, the offerings are incredibly ordinary, and I thought how is it we have an ordinary offering with the Hunter Valley on our doorstep," he said.

Artisanal Cellars will, he said, "bring the cellar door to the CBD", including tastings with wine makers and the range including predominantly wine, craft beers and spirits.

"We are not there to compete with the Dan Murphy or BWS, our offering differs in terms of customer engagement and product."

Honest Paper's Bella Cauchi said the power of a collective was appealing and, that after the lockdown, consumers were craving in-store retail.

"Crap retail is dying and good retail is thriving. I love online shopping but there's nothing like going to into a store and testing and it and touching it and smelling it and paying for it in person. People are human and desire connection."

Iris Capital development manager Jamie Boswell said the laneway had a "chilled, village vibe with something for everyone".

"This reflects the breakdown of residents moving in - retired, families, students," he said.

He said about 600 residents will live in the developments in the East End, stage one site.

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