Parrot occupying lake area (3)
I believe the answer is:
kea
'parrot' is the definition.
(I know that kea is a type of parrot)
'occupying lake area' is the wordplay.
'occupying' indicates a hidden word (letters for the answer occupy part of the clue).
'KEA' is hidden in the letters of 'lake area'.
(Other definitions for kea that I've seen before include "NZ flyer" , "Large New Zealand parrot" , "Green NZ parrot" , "bird" , "NZ mountain parrot" .)