@Jillella, Praveen Please let us know if the issue remains. Try creating the workspace using the below rest api https://learn.microsoft.com/en-us/rest/api/apimanagement/workspace/create-or-update?view=rest-apimanagement-2024-05-01&tabs=HTTP
Also, workspace is currently available only in few regions as mentioned in the below document. https://learn.microsoft.com/en-us/azure/api-management/workspaces-overview#regional-availability
Feel free to reach out for any further questions. I would be happy to answer if any.