Capital piece of furniture one installed (5)
I believe the answer is:
sofia
'capital' is the definition.
(capital of Bulgaria)
'piece of furniture one installed' is the wordplay.
'piece of furniture' becomes 'sofa' (sofa is a type of furniture).
'one' becomes 'i' (Roman numeral).
'installed' indicates putting letters inside.
'sofa' placed around 'i' is 'SOFIA'.
(Other definitions for sofia that I've seen before include "Bulgarian capital" , "capital city" , "Foreign city" , "seat of government" , "European city" .)