Sultanas extracted from Danish are mushy (5)

I believe the answer is:

harem

'sultanas' is the definition.
(quarters for sultanas)

'extracted from danish are mushy' is the wordplay.
'extracted from' indicates a hidden word.
'HAREM' is hidden in the letters of 'danish are mushy'.

(Other definitions for harem that I've seen before include "Set of wives" , "Court ladies" , "Female living quarters in a Muslim household" , "Home to concubines" , "Group of female partners" .)

I've seen this clue in The Telegraph.

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