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Landmark buildings and diversification opportunities in the residential market

Lucia Gibilaro (Department of Management, Economics and Quantitative Methods, University of Bergamo, Bergamo, Italy)
Gianluca Mattarocci (Department of Management and Law, University of Rome Tor Vergata, Rome, Italy)

International Journal of Housing Markets and Analysis

ISSN: 1753-8270

Article publication date: 3 October 2016



This article aims to analyze the performance and risk of landmark building in the housing sector and to evaluate their usefulness for a diversification strategy.


After comparing summary statistics on the performance of landmark building with respect to other types of housing investments, the article evaluates their usefulness for a diversification strategy. The role of landmark buildings is studied using the modern portfolio theory and evaluating the role of this type of asset in the optimal asset allocation. The analysis is performed considering both the risk/return trade-off in a one-year and a multiple-year time horizon.


The results show that a landmark building can be a good investment opportunity, especially for high-risk/return investors. A not perfect correlation of the returns of this asset class with other types of housing investments implies the existence of a minimum investment in this asset class for almost all portfolios on the efficient frontier. Results are robust with respect to the length of the investment time horizon.


The article presents a unique analysis of intra-housing market diversification opportunities focusing on the role of landmark building in the portfolio construction. Empirical evidence supports the hypothesis that real estate investors can take advantage of investing in landmark buildings in the residential sector as well because there are no reasons to limit such investments to trophy buildings in the office and commercial sectors.



The article is the result of the authors’ common efforts and continuous exchange of ideas. Authors are grateful to the two anonymous referees and ERES 2012 delegates for all the useful suggestions provided for improving the previous versions of the paper. The individual parts of the article can be acknowledged as follows: the introduction and literature review were worked out by Lucia Gibilaro, and the empirical analysis and conclusion by Gianluca Mattarocci.


Gibilaro, L. and Mattarocci, G. (2016), "Landmark buildings and diversification opportunities in the residential market", International Journal of Housing Markets and Analysis, Vol. 9 No. 4, pp. 429-445.



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