Comment 1 for bug 1883869

To answer your question:
> Is there any way to increase the space available for VM Creation

Yes - you can use a larger disk. The starlingx platform allocates disk space on the root disk for various platform functions - you can see the allocated space with:
fdisk -l /dev/sda (or whatever your root disk is named)
lvs (to see the logical volumes in the Linux LVM partition)

We don't have any plans to reduce the disk space required by the platform. The 500 GB disk is the minimum recommended disk size - you are free to use a larger disk.