South of Iowa's capital city (5)
I believe the answer is:
sofia
'capital city' is the definition.
(I've seen this before)
'south of iowa's' is the wordplay.
'south' becomes 'S' (synonyms).
'iowa' becomes 'IA' (standard US state two-letter abbreviation).
's'+'of'+'ia'='SOFIA'
(Other definitions for sofia that I've seen before include "Capital of Bulgaria" , "Bulgarian city" , "Foreign city" , "European city" , "Balkan capital" .)