The most common and most likely answer to this crossword clue is the 7 letter word PARKING
P
A
R
K
I
N
G
Buddy explains!

The straight part
We know that "occupying space" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case occupying space = parking.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does PARKING mean?
PARKING verb- To bring (something such as a vehicle) to a halt or store in a specified place.
- To defer (a matter) until a later date.
- To bring together in a park, or compact body.
- To enclose in a park, or as in a park.
- To hit a home run, to hit the ball out of the park.
- To engage in romantic or sexual activities inside a nonmoving vehicle.
- (sometimes reflexive) To sit, recline, or put, especially in a manner suggesting an intent to remain for some time.
- To invest money temporarily in an investment instrument considered to relatively free of risk, especially while awaiting other opportunities.
- To register a domain name, but make no use of it (See domain parking)
- (oyster culture) To enclose in a park, or partially enclosed basin.
- To promenade or drive in a park.
- (of horses) To display style or gait on a park drive.
- The action of the verb to park.
- Space in which to park a car or other vehicle.