The Kennet shopping centre was built in the 1970s and is in a state of decline, according to the applicant.
Plans to revamp it were rejected by West Berkshire Council in November 2022 and in January.
The homes in the Old Town plan are proposed to be a mixture of private sale and Build to Rent.
The application also proposes the provision of five new commercial units fronting Bartholomew Street and Market Place, in addition to two reconfigured units.
Nando’s, Kung Fu and the Vue cinema would remain in place.