As Stockholm grew rapidly during the 14th century, the city within the city walls became cramped for space, and the surrounding shores started to be built upon and subsequently by land fillings between the bridges extended into the water.
Thus, elongated blocks appeared between narrow alleys along the eastern shore of the city, with the exception of the area outside the only eastern city gate — the so-called Köpmanporten ('Merchant's Gate') which extended Köpmangatan ('Merchant's Street') from the city's central square, Stortorget ('Large Square'), beyond the city wall over Köpmanbrinken.
Originally, the marketplace was called Fiskestrand ('Fishery Shore') and also encompassed a section of the shoreline stretching north up to the present alley Skeppar Karls Gränd.
[1] In 1461, a blacksmith named Henrik is mentioned as having forged on a water well on the square, at the time the biggest in Stockholm.
However, the square started to be built upon during the early 1520s, which eventually led to the present block on the location, Diana, which still contains the well.