Abstract
Landmark buildings are outstanding constructions recognizable on the basis of their unique design, high visibility and/or extraordinary relevance for the country. Literature on housing markets demonstrates that their price and rent dynamics are not comparable to other types of residential buildings but there are no evidences on the advantages related to their inclusion in a diversified real estate portfolio.The paper, using a database representative of one of countries with the biggest cultural and natural heritage, applies the market portfolio theory for studying the advantages related to a diversification strategy in the residential sector that includes also the landmark investment. Results show that the landmark investment could be a good investment opportunity especially for high risk/return investors and the low correlation of this asset class respect to other types of housing investments implies the existence of a minimum investment on this asset class for almost all the efficient portfolios on the frontier. Empirical evidence supports the hypothesis that institutional real estate investors can take advantage from investing in the landmark buildings also in the residential sector and there are no reasons for limiting the investment to the trophy buildings available in the office and commercial sectors.
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