Which of the question sounds more natural in the given context?
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Do you have more context on your question? Additionally, what are your guesses so far?
Note that both questions mean different things: "What is that splendid building / Where is that splendid building?". They are not two different ways of asking for the same information. From the provided answer, I'm inclined to believe that the more natural question would be the first one:
What is that splendid building? That splendid building is the exchange students' canteen.
Where is that splendid building? That splendid building is [in] the exchange student's canteen.
In the case of the second sentence, you could stretch the point and imagine that the canteen is somehow a smaller part or section of a larger, splendid building you have been discussing previously and therefore you are using あの立派な建物 as a label or identifier rather than as a description.
However, if you swap the terms あの立派な建物 and 留学生の食堂, then the second question with どこですか makes more sense:
留学生の食堂はどこですか。あの立派な建物です。Where is the exchange students' canteen ? It's that splendid building.
Note that the structure of the sentence is exactly the same, neither is more correct than the other in terms of syntax. However, it just makes more or less sense depending on the meaning of the words used.
It's only natural that you ask for what something is based on a description (立派な建物), whereas if you have the definition or the concept (留学生の食堂), then it makes no sense to ask for what it is, but for other related information, e.g. where it is, what is the time table or whatever.