News: UPDATE 1-Australia's Charter Hall cancels $860 mln property trust listing

(Adds details on trust assets, quote, share price, background)

Australian listed property company Charter Hall Group (CHC) said on Wednesday it had canceled a A$1.12 billion ($860 million) initial public offering of a commercial property trust because of a lack of institutional support.

The offer did not attract the "sufficient quality of support that the group deemed appropriate to create an orderly market," Charter Hall said in a statement.

Charter Hall had also planned to buy a direct stake in the Long WALE real estate trust, or REIT, which had promised investors a 5.3 percent yield in the first year. The trust was due to start trading on the Australian Securities Exchange on Wednesday.

Charter Hall said it would now consider alternative options for the portfolio, which holds 66 retail, commercial and industrial properties, mostly on Australia's east coast but also in state capitals Adelaide and Perth, leased to government and corporate tenants.

With an offer price of A$4 per share, the listing was set for a market capitalisation of A$1.12 billion, with about A$500 million to be held by Charter Hall itself and the rest to be sold to retail and institutional investors, Charter Hall's head of investor relations, Richard Stacker, told Reuters last week.

Stacker said then that the retail offer was "hugely oversubscribed" and that there was "strong demand" from institutional investors.

Shares in Charter Hall fell to a near 6-month low at the open of trading, losing 3.4 percent, while the benchmark S&P/ASX 200 index (xjo) gained 0.2 percent.

The REIT did not include residential properties or apartments, which Australia's central bank warned last week could be in oversupply. ($1 = 1.3040 Australian dollars)