If you try to run the PnP PowerShell command New-PnPSite using a managed identity or App Registration, in a multi-geo tenant, it will create the site in the default tenant. To get around this, you can use the PreferredDataLocation parameter to set the desired location, but you’ll also need to update your MS Graph permissions.


If you run the New-PnPSite command with the -PreferredDataLocation parameter and your permission are not correct, you will receive this error:

Code: Authorization_RequestDenied Message: The requesting principal is not authorized to set group preferred data location.

Open your App Registration and add the following MS Graph application permissions:
Group.Create, Group.ReadWrite.All, Directory.ReadWrite.All

Other people who had the same issue:
https://github.com/pnp/powershell/issues/2629
https://github.com/pnp/PnP-PowerShell/issues/2682
https://learn.microsoft.com/en-us/answers/questions/1099399/unable-to-create-modern-team-site-using-pnp-powers

Complete list of the geo codes can be found here:
https://learn.microsoft.com/en-us/microsoft-365/enterprise/multi-geo-add-group-with-pdl?view=o365-worldwide#geo-location-codes

Set of geo codes as of March 2024: