Southern shopping area that's compact (5)
I believe the answer is:
small
'that's compact' is the definition.
(I've seen this in another clue)
'southern shopping area' is the wordplay.
'southern' becomes 's' (abbreviation).
'shopping area' becomes 'mall' (shopping mall).
's'+'mall'='SMALL'
(Other definitions for small that I've seen before include "Not great (in number)" , "Not large" , "Itsy-bitsy" , "Tiny" , "Minute" .)